Wall Street closed at record highs, the dollar edged up and copper touched a three-year peak on Monday as upbeat Chinese data drove optimism about the world's second-biggest economy, while oil prices jumped due to supply worries after Iraqi forces seized the oil-rich city of Kirkuk from Kurdish fighters.
Brent crude for December LCOZ7, +0.78% rose 33 cents, or 0.6%, to $58.21 a barrel-also on track for its highest finish since late September.
Australian shares .axjo extended their winning streak to a fourth straight session to rise 0.6 percent, while Japan's Nikkei .n225 rallied for a sixth day to the highest since November 1996.
The Baghdad government recaptured territory across northern Iraq from Kurds on October 17, widening a campaign that has shifted the balance of power in the country.
Iraq's oil minister said it had asked oil major BP to develop the Kirkuk oilfields, but the company said it was in no rush to return to the area until security improves.
"The security premium built into prices from the (Iraqi-Kurdish) situation is in the process of vanishing", said John Kilduff, partner at Again Capital LLC in NY.
In response, US crude climbed 0.9 percent to $51.92 a barrel, not far from $52.85 touched late last month - a level not seen since April. An industry report showed USA inventories fell last week, with government data Wednesday forecast to show a fourth straight drop. Last Friday U.S. President Donald Trump refused to certify Iran's compliance over a nuclear deal, leaving Congress 60 days to decide further action against Tehran.More news: Duchess of Cambridge Dances With Paddington Bear
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During the previous round of sanctions against Iran, some 1 million barrels per day of oil was cut from global markets.
OPEC and 10 producers outside the cartel, including Russian Federation, first agreed late a year ago to cap their production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices. It last stood at $7,110.5.
After months of range-bound trading during which OPEC-led supply cuts supported crude prices but rising US output capped markets, prices have moved up significantly this month just as demand looks stronger than at any point in recent months, especially in China. "Oil security remains a critical issue".
However, without the support of other countries, it appears unlikely that production would fall by 1 million barrels per day to the levels before Western sanctions were imposed on the country, Goldman said.
The bank said there was further upside potential to its outlook.
"We see Brent averaging $54 this quarter and $52.50 per barrel in 1H18, compared with our previous forecasts of $50 and $49.50 per barrel respectively", it said.