Investing.com - New York-traded crude oil futures ended Friday’s session at a one-week high, after data showed that U.S. consumer sentiment rose more than expected in May, climbing to an almost six year high.
Oil prices drew further support from rising U.S. equities markets, with the S&P 500 index closing at a fresh record high on Wall Street.
U.S. shares and crude oil have traded in tandem in recent weeks, on the belief share prices act as a proxy for economic sentiment and are a bellwether for oil demand.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July rose 1.2% Friday to settle the week at USD96.29 a barrel by close of trade.
Earlier in the day, prices rose by as much as 1.3% to hit a session high of USD96.42 a barrel, the strongest level since May 9.
On the week, Nymex oil futures added 0.75%, the fourth consecutive weekly advance.
The University of Michigan said its consumer sentiment index jumped to 83.7 in May, its highest level since 2007, from 76.4 in the preceding month, outstripping expectations for a reading of 78.0.
A separate report by the Conference Board showed that its index of leading economic indicators rose 0.6% in April, more than double the 0.2% increase expected by economists.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Gains were limited as the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, rose 0.5% on Friday to settle the week at 84.34, the strongest level since July 2010.
A stronger dollar makes U.S. commodities more expensive for importers holding other currencies.
The dollar was boosted amid growing expectations the Federal Reserve will wind down its stimulus program, amid indications of an improving U.S. economic outlook.
The Fed is currently running a USD85 billion monthly asset-purchasing program, which weakens the greenback to spur recovery.
In the week ahead, oil traders will be focusing on Wednesday’s Federal Reserve minutes, as well as testimony on the economic outlook and monetary policy by Fed Chairman Ben Bernanke.
Markets will also be awaiting the release of key euro zone data on manufacturing and service sector activity.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for July delivery rose 0.9% on Friday to settle the week at USD104.68 a barrel.
The London-traded Brent contract added 0.7% over the week, while the spread between the Brent and the crude contracts stood at USD8.39 a barrel.
The gap between the contracts narrowed to the lowest level since January 2011 earlier in the week, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.