Oil holds strong after US jump back to $59

Oil prices rose on Monday, adding to big gains late on Friday that took US crude back to $59 a barrel. London August Brent gained 46 cents to $58 a barrel after gains of nearly $2 on Friday. US crude, shut on Monday for the July 4 public holiday, surged by $2.25 on Friday to end at $58.75 a barrel.
Prices have staged a rapid recovery from last week's 3-day fall of $5 after Monday's record $60.95.
Dealers said the profit-taking sell-off was short-lived after concerns resurfaced about refiners' ability to build stocks of middle distillate products heating oil and diesel ahead of peak seasonal demand in the fourth quarter.
IPE gas oil settled $4 higher at $544.50 per tonne.
"All the worries regarding the winter are still there," said Frederic Lasserre of SG Commodities. "I think we will see $60 again ... and some of the funds may have $65 in mind."
"The march of the bulls continues to be fed by fears of the fourth quarter," said Washington-based consultancy PFC Energy.
"Will supply, particularly of middle distillates, be adequate to meet fourth quarter demand?"
Adding to bullish sentiment, the Organisation of the Petroleum Exporting Countries last week suspended talks on increasing official output limits by another 500,000 barrels per day.
The increase would have come on top of one of the same magnitude agreed by Opec just two weeks ago but only Saudi Arabia has any meaningful spare capacity.
The cartel says there is little it can do to bring down prices and has blamed global refinery bottlenecks rather than a lack of crude for high prices.
TOKYO: Oil edged higher in London on Monday after sharp gains late last week, but analysts said prices might ease once US markets reopen from the long weekend.
August Brent crude on the International Petroleum Exchange (IPE) traded up 18 cents to $57.72 a barrel, but only 21 contracts had changed hands by 0552 GMT.
The contract settled up $1.96 at $57.54 a barrel on the International Petroleum Exchange (IPE) on Friday.
The US crude futures was not trading on Monday due to the Independence Day holiday in the United States.
August crude settled at $58.75 on Friday, up 4 percent on the New York Mercantile Exchange (NYMEX), but well below Tuesday's record peak of $60.95 a barrel.