Benchmark crude rose USD 2.35, or 2.8 per cent, at USD 86.58 per barrel in late morning trading in New York. Brent crude, which is used to price oil from foreign countries, rose USD 2.87, or 2.6 per cent, to USD 113.98 in London. Prices jumped after China said its inflation rate dropped last month, giving Chinese leaders more room to further stimulate the economy without overheating it. This week China reported a slowdown in exports, raising concerns that sluggish demand from the US and Europe was taking a toll on world's second-largest economy.
But with low inflation, analysts said China has the ability to ease limits on bank lending to keep its economy growing. In the US, consumers spent more on cars, clothing and furniture last month. Consumer spending, which drives the US economy, pushed retail sales up 1.1 per cent in Sep, the biggest gain in seven months.
Financial leaders of the world's largest economies were meeting in Paris to discuss how to resolve Europe's debt crisis. The Group of 20 is expected to address ways to save Greece from bankruptcy and kick-start European economies.