Crude oil futures touched the highest level since September last year with traders taking their cue from mostly higher European, US and Asian stock markets.
Crude for February delivery rose 68 cents to settle at $96.24 a barrel on the New York Mercantile Exchange, the first time it closed above $96 in four months. The February contract expired at the end of trading on Tuesday.
Normal US floor trading was closed Monday for the Martin Luther King holiday.
The new front month March contract climbed 64 cents to settle at $96.68 a barrel.
Analysts said gains were also fuelled by hopes of increased demand after the International Energy Agency lifted its global oil demand forecast this year by 900,000 barrels a day, citing rising demand from China.
Focus also turned to Japan after the central bank’s two-day meeting. The Bank of Japan set a 2.0% inflation target and pledged to embark on an unlimited asset purchase programme similar to the Federal Reserve. The central bank also kept its benchmark rate unchanged at a range of zero to 0.1%.
However, the unlimited asset repurchase programme will not come into force until January 2014, later than many had hoped for.
Otherwise traders mostly overlooked downbeat US housing data out on Tuesday. The National Association of Realtors said sales of existing home fell 1% in December to a seasonally adjusted annual rate of 4.94m.
On the ICE futures exchange Brent crude oil for March delivery added 68 cents to $112.39 a barrel.
A safe haven drive sent gold futures sharply higher on Tuesday as markets mulled the BoJ’s stimulus plan and disappointing US economic data.
Gold for February delivery advanced $6.20 to settle at $1,693.20 an ounce on the Comex division of the New York Mercantile Exchange.