Crude oil futures rallied on Tuesday and settled at its highest level since May 10^th, 2011 in reaction to uncertainty over oil supplies due to Iran tensions. Moreover US manufacturing data was also better than expected further supporting the oil. As per the Institute of Supply Management, the manufacturing index gained to 53.9 for the month of December as compared to 52.7 in the month of November.

President of Prestige Economics, Jason Schenker commented, “The ISM number was wildly positive, [and] U.S. economic optimism is driving crude prices higher, it’s always nice to come back and have a blowout number to start the year.”

Weaker greenback and stronger US equities also supported the bullish drive of crude oil futures as the dollar index DXY fell to 79.765 as compared to 80.289 on Friday’s North American trading session. Crude oil futures contract for February delivery surged 4.2 percent or $4.13 to settle at $102.96 per barrel on the New York Mercantile Exchange. Crude oil price has increased by 8.2 percent in the year 2011.

Among other commodities, gasoline futures for February delivery gained 3.4 percent or $0.09 to $2.75 per gallon while heating oil futures for the same month delivery gained 4.3 percent or $0.12 to $3.04 per gallon. Natural gas futures contract for February delivery slightly gained to $2.99 per million British thermal units.