Oil hovers above $59 on signs recession easing

SINGAPORE: Oil hovered above $59 a barrel on Tuesday in Asia after investors took heart from signs the US recession is easing.

Benchmark crude for June delivery was up 10 cents to $59.13 a barrel midday in Singapore in electronic trading on the New York Mercantile Exchange. On Monday, the contract jumped $2.69 to settle at $59.03.

Investors on Monday cheered a better-than-expected profit report from home improvement chain Lowe's Cos., an uptick in homebuilder sentiment and positive comments from analysts about US banks, all of which suggested the US economy is gradually emerging from a severe recession. The Dow Jones industrial average jumped 2.9 per cent.

While most analysts expect oil prices to increase over the next year as global economic growth recovers, some suspect the recent surge from below $35 a barrel in March may have gone too far, too fast.

``The move from $40 to $60 has happened faster than we thought it woul to $4.15 per 1,000 cubic feet. In London, Brent prices fell 3 cents to $58.44 a barrel on the ICE Futures exchange.