PERTH - Oil rose on Monday, extending last week's climb that saw prices jump to a record high near $128 a barrel, driven by concerns over tight fuel supplies.
U.S. light crude for June delivery rose 31 cents to $126.60 a barrel by 2355 GMT.
It closed up $2.17 at $126.29 a barrel on Friday after touching a peak of $127.82 earlier in the day on a bullish price forecast from investment bank Goldman Sachs.
London Brent crude rose 29 cents to $125.28.
"The market still has a bullish leaning because of a weak dollar and fuel supply concerns," said Sydney-based David Moore, a commodity analyst at the Commonwealth Bank of Australia.
"As for OPEC, the market has taken the view that it is reluctant to raise production and is not expecting a sudden increase in output over and above what Saudi Arabia has indicated."
Saudi Arabia has boosted oil output by 300,000 barrels per day to meet demand and compensate for other producers' lower output, Saudi Oil Minister Ali al-Naimi said on Friday.
While OPEC's smallest producer, Ecuador, said last week that members should consider raising output to stem the oil rally, other larger OPEC members Iran and Qatar said over the weekend that there was no need for an emergency OPEC meeting before September.
The U.S. dollar fell against most major currencies after fresh data pointed to a weak economy and reduced the chances of any interest rate hikes later this year by the Federal Reserve.
Diesel has also taken centre stage in the world energy crunch as tight power supplies in China, South Africa, Chile, Argentina and parts of the Middle East triggered a boom in demand for middle distillates for electric generators, lending support to oil prices.
Chinese demand for imported diesel is expected to rise even further in June after last week's deadly earthquake disrupted gas supplies to major cities and as companies built stockpiles ahead of the summer Olympics.
Oil prices have risen six-fold since 2002 and doubled since last year as rising demand from China and other developing nations stretched spare production capacity, adding pressure on the U.S. economy already hard hit by a housing slump.
The International Monetary Fund's chief economist warned on Friday that record high oil prices could significantly dampen progress that has been made so far in calming financial markets.
Crude oil speculators on the New York Mercantile Exchange increased net long positions last week, according to data from the Commodity Futures Trading Commission released Friday.
Net crude long positions rose to 71,767 in the week to May 13, up from 63,218 in the previous week.
U.S. light crude for June delivery rose 31 cents to $126.60 a barrel by 2355 GMT.
It closed up $2.17 at $126.29 a barrel on Friday after touching a peak of $127.82 earlier in the day on a bullish price forecast from investment bank Goldman Sachs.
London Brent crude rose 29 cents to $125.28.
"The market still has a bullish leaning because of a weak dollar and fuel supply concerns," said Sydney-based David Moore, a commodity analyst at the Commonwealth Bank of Australia.
"As for OPEC, the market has taken the view that it is reluctant to raise production and is not expecting a sudden increase in output over and above what Saudi Arabia has indicated."
Saudi Arabia has boosted oil output by 300,000 barrels per day to meet demand and compensate for other producers' lower output, Saudi Oil Minister Ali al-Naimi said on Friday.
While OPEC's smallest producer, Ecuador, said last week that members should consider raising output to stem the oil rally, other larger OPEC members Iran and Qatar said over the weekend that there was no need for an emergency OPEC meeting before September.
The U.S. dollar fell against most major currencies after fresh data pointed to a weak economy and reduced the chances of any interest rate hikes later this year by the Federal Reserve.
Diesel has also taken centre stage in the world energy crunch as tight power supplies in China, South Africa, Chile, Argentina and parts of the Middle East triggered a boom in demand for middle distillates for electric generators, lending support to oil prices.
Chinese demand for imported diesel is expected to rise even further in June after last week's deadly earthquake disrupted gas supplies to major cities and as companies built stockpiles ahead of the summer Olympics.
Oil prices have risen six-fold since 2002 and doubled since last year as rising demand from China and other developing nations stretched spare production capacity, adding pressure on the U.S. economy already hard hit by a housing slump.
The International Monetary Fund's chief economist warned on Friday that record high oil prices could significantly dampen progress that has been made so far in calming financial markets.
Crude oil speculators on the New York Mercantile Exchange increased net long positions last week, according to data from the Commodity Futures Trading Commission released Friday.
Net crude long positions rose to 71,767 in the week to May 13, up from 63,218 in the previous week.
