Oil rises as demand for refined products fuels crude's rally

Oil fluctuated as a global squeeze on refined products continued to pull fuel prices higher while Chinese economic data provided bearish headwinds.

West Texas Intermediate rose 1.6 per cent to trade near US$112 on Monday as US gasoline futures topped US$4 a gallon for the first time ever. Rising futures tend to trickle through to the pump quickly, signaling more pain for drivers when the summer driving season starts at the end of this month.

“The stronger products get, the more optimistic the market gets on crude runs increasing this summer,” said Scott Shelton, an energy specialist at TP ICAP Group Plc.