Futures advanced as Morgan Stanley increased its Brent oil 2011 outlook by 20 percent to $120 a barrel and Goldman estimated prices would hit $130. Prices also gained as the dollar fell 0.4 percent against the euro as of 9:23 a.m. in New York, adding to the investment appeal of commodities.
"Goldman is calling for crude to go back up and the dollar is starting to show signs of weakness," said Phil Flynn, vice president of research at PFGBest in Chicago.
Gasoline for June delivery rose 7.19 cents, or 2.5 percent to $3.01 a gallon at 9:45 a.m. on the New York Mercantile Exchange. read Goldman Sachs forecasts Brent crude prices
Crude oil for July delivery increased $1.71 to $99.41 a barrel on the exchange.
Gasoline also gained as U.S. inventories were 16 percent below a year earlier, according to Energy Department data. This weekend's three-day Memorial Day holiday period is the traditional kickoff of the summer driving season.
"You have fairly tight gasoline supplies and the dollar turned down today," said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
The department is scheduled to report last week's inventories at 10:30 a.m. tomorrow in Washington. Gasoline stockpiles probably rose 500,000 barrels, according to the median estimate of 12 analysts in a survey by Bloomberg News.
Supplies of distillate, including heating oil and diesel, likely increased 50,000 barrels, according to the survey.
Regular retail gasoline dropped 1.5 cents to $3.828 a gallon, AAA said on its website.
Heating oil for June delivery added 5.21 cents, or 1.8 percent, to $2.8992 a gallon on the exchange. (souce : Bloomberg)
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