Oil surges higher on weak dollar, equity gains

Oil continued to push higher in Asian trade today with investor sentiment bolstered by Wall Street's strong showing and a weak dollar, analysts said.
    
New York's main contract light, sweet crude for November delivery rose nine cents to $79.70 a barrel. Brent North Sea crude for December delivery gained 12 cents to $77.89.
    
"Oil market sentiment benefited from the firm tone on international equity markets. The soft US dollar also remained a plus for the oil price," analysts from the Commonwealth Bank of Australia said in a report.
    
Wall Street closed higher yesterday with the Dow Jones Industrial Average rising 96.28 points to end at 10,092.19, after scaling a new high for the year at 10,117.96.
    
Expectations that third quarter US corporate earnings would reflect the economy's recovery from a prolonged recession were the main reason behind the surge in the US equity markets, analysts said.
    
"The positive sentiment across financial markets has been interpreted as a harbinger of oil demand growth, allowing crude oil prices a 10% appreciation during October," said analyst Mike Fitzpatrick of MF Global.
    
"As (third quarter) earnings reports continue to be filed, they will serve to reveal this strategy as either an illusion or confirmation that sustainable recovery is underway," he added.