The price of oil has risen to just under $58 a barrel, a rise of more than 8% on the week, as optimism about the state of the world economy has grown.

Global markets have also risen, continuing a two-month climb, with UK shares up 4.5%, Japanese shares up 5% and US shares up 2.4% on the week.

Prices, however, are still substantially lower than last year.

There are also fears US jobs data, due later, may dash hopes the world's biggest economy is on the rebound.

On the bright side

Oil has gained more than 70% from its lows of about $34 in February.

Fears that a weaker global economy would reduce demand for oil suppressed prices, dragging them down from last year's record highs of nearly $150.

Increased optimism that the recession may end sooner than originally thought is spurring price gains.

This week's gains have been prompted by a few signs that the worst may be over.

US retailers reported better-than-expected monthly sales for a second month in a row in April.

The number of US workers filing new claims for jobless aid unexpectedly fell by 34,000 last week to a seasonally adjusted 604,000, according to Labor Department figures released on Thursday.

News on Thursday that 10 of America's largest 19 banks need a combined $74.6bn (£50bn) of extra funds to boost their reserves came as little surprise and allayed fears and uncertainty about the financial sector.

"This (stress test result) could be seen by many as the last hurdle for the markets to continue their stellar bull run," said Chris Hossain, senior sales manager at ODL Securities.

"These requests for more cash are only for worst-case scenarios - whilst it might still be too early to call the end of the recession, the first quarter appears to have seen credit markets easing and confidence returning."

Others warned that it might be too early for optimism.

"People got optimistic (after the test results) because it wasn't as bad as they thought it would be," Tony Nunan, risk manager at Mitsubishi Corp said.

"But we are not out of the woods yet. The economy has yet to recover and there could be another dip in prices," he added.