SINGAPORE: Brent crude futures rose more than 2 percent toward $63 a barrel on Monday as Asian markets firmed into a holiday-shortened week and consensus spread that prices 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 2.4 percent $62.86 at 0748 GMT. US crude was also up 2.3 percent at $58.45 a barrel.
While analysts said prices would likely remain over $60 barrel for the rest of the year, they also said that further large 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.
National Australia Bank said "given the lead time in permit approval and rig construction ahead of oil production, a sizeable negative US supply response given the price drop is unlikely to take place until late 2015, which places further downward pressure on oil prices in the first six months of next year."
The bank added that it expected Brent and WTI to average $68 and $64 per barrel respectively in 2015.
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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