SINGAPORE: Oil prices rose on Monday as Asian markets opened strongly into a holiday-shortened week and consensus spread that Brent crude futures would likely remain above $60 for the rest of the year.
MSCI's broadest index of Asia-Pacific shares outside Japan extended gains and was up 1.4 percent. Japan's Nikkei pared early gains but managed to eke out a 0.1 percent rise ahead of a Japanese public holiday on Tuesday, while Australian shares surged 1.9 percent.
Brent rose more than a dollar to a session high of $62.61 per barrel but gave up some gains to trade up 85 cents at $62.23 by 0645 GMT. US crude was up 69 cents at $57.82 a barrel.
Although analysts said prices would likely remain over $60 barrel for the rest of the year, they also said that further large price jumps were unlikely.
"Any oil relief rally is likely to be limited and short-lived, barring a major outage. We see too many headwinds that must be addressed," Morgan Stanley said on Monday in a report.
"An oversupplied market is likely to keep crude oil prices under pressure in the first half of 2015, while demand struggles to recover in Asia," ANZ said in a report, also on Monday.
Beyond fundamental drivers, Reuters analyst Wang Tao said that Brent prices could drop as low as $41.99 per barrel in the next three months before receiving support, based on technical indicators, and that prices would unlikely rise above $70.
"The rebound may not be strong enough to extend to $71.37, most likely it could end at a lower level," he said.
Analysts also said they expected relatively low price volatility for the remainder of the year as traders begin to wind down their 2014 positions.
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