Oil rose to near $86 a barrel in Asia on Thursday, extending a three-day rally amid speculation that the U.S. may implement stimulus measures to boost a flagging recovery.
Benchmark oil for July delivery was up 50 cents to $85.52 per barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
The contract rose 73 cents to settle at $85.02 in New York on Wednesday. In London, Brent crude for July delivery was up 28 cents at $100.92 per barrel on the ICE Futures exchange.
U.S. Federal Reserve Chairman Ben Bernanke is scheduled to speak to Congress later on Thursday, and investors will be closely watching for any evidence the central bank plans another round of Treasury purchases, known as quantitative easing.
Previous stimulus programs have sent commodities and stock markets higher. Boosting money supply has also tended to weaken the U.S. dollar, which makes commodities traded in dollars such as oil cheaper for investors with other currencies.
Oil has dropped from $106 early last month to below $82 on Monday amid signs economic growth and crude demand in Europe, the U.S. and China is slowing. U.S. employment growth has disappointed analysts in recent months, and traders will be eyeing jobless claims for last week, which are scheduled to be announced later Thursday.
"Maintaining the upward momentum will likely require much assistance from jobless claims as well as some quantitative easing hints out of Bernanke," energy trader and consultant Ritterbusch and Associates said in a report.
In other energy trading, heating oil was up 0.8 cent at $2.68 per gallon while gasoline futures gained 0.4 cent at $2.69 per gallon. Natural gas rose 1 cent at $2.43 per 1,000 cubic feet.