| GEO Business|
| Oil prices hit four-month high|
| Updated at: 0102 PST, Tuesday, March 24, 2009|
NEW YORK: Oil prices climbed Monday to their highest levels since late 2008 in tandem with a world stock market rally on a US government plan to rid ailing banks of their toxic assets.
New York's main futures contract, light sweet crude for delivery in May, bounced to 54.05 dollars a barrel, the highest point since November, before ending 1.73 dollars higher from Friday's close to 53.80 dollars.
London's Brent North Sea crude for May jumped 2.25 dollars to settle at 53.47 dollars a barrel. Earlier it struck 53.86 dollars -- also the highest point since November.
Global stock markets rallied Monday as the United States launched a 500-billion-dollar (366-billion-euro) plan to purge banks of toxic assets.
Traders said investors eyed the oil market as another avenue to whet their appetite for risk amid hopes that a rehabilitated banking sector would help fuel an economic recovery of the United States, the biggest energy consumer.
"People are making bets that we will have the banking system partially fixed and have credit start flowing, that the stimulus that is now undergoing in the US will be enough to lift ourselves," said Bart Melek of BMO Capital Markets.
"And that essentially means that at some point late in the year we will probably have better demand for oil in the US," Melek said.
The US Treasury unveiled a long-awaited plan Monday to buy up toxic assets clogging the financial system using government funds, loans to investors and guarantees to attract private capital.