Investing.com - West Texas Intermediate oil futures reclaimed the key $40-level on Thursday, as sentiment was boosted amid a global stock market rally.
Crude oil for delivery in October on the New York Mercantile Exchange surged $1.68, or 4.35%, to trade at $40.28 a barrel during European morning hours.
The Shanghai Composite rallied more than 5% on Thursday to reclaim the critical 3,000-level, after crashing 23% over the past five sessions.
The upbeat sentiment carried over to European markets, where Germany's DAX rallied more than 2% after the open, while France’s CAC 40 and London's FTSE 100 were both up around 2%.
Appetite for riskier assets improved after Wall Street notched its biggest one-day gain since 2011 overnight. U.S. stock markets soared almost 4% Wednesday, boosted by upbeat economic data and dovish comments from a key Federal Reserve official.
Data on Wednesday showed that core capital goods orders, a closely watched proxy for business spending, rose 2.2% last month, the biggest increase since June last year.
Meanwhile, New York Federal Reserve President William Dudley said that the case for a rate hike in September is "less compelling" given international developments and volatility in financial markets. Dudley is a voting member of the Federal Open Market Committee.
New York-traded oil futures tumbled to $37.75 on Monday, a level not seen since February 2009, as steep declines on China's stock market and growing concerns over the health of the Asian nation's economy weighed.
The turmoil in markets began when China unexpectedly devalued the yuan earlier this month, sparking fears that the economy may be slowing at a faster than expected rate.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery jumped $1.64, or 3.79%, to trade at $44.78 a barrel. London-traded Brent futures sank to $42.23 on Monday, the lowest level since March 2009.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
The spread between the Brent and the WTI crude contracts stood at $4.50 a barrel, compared to $4.54 by close of trade on Wednesday.