NEW YORK (CNNMoney.com) -- Oil prices rose Monday after better-than-expected economic reports raised optimism about improved energy demand. A pipeline attack in Nigeria also sparked supply concerns.
What prices are doing: Light, sweet crude for March delivery rose $1.54, or 2%, to settle at $74.43 a barrel following a 4-day retreat.
What's moving prices: The Institute for Supply Management said economic activity in the manufacturing sector expanded in January for the sixth consecutive month. Increased manufacturing is a sign of increased demand for oil.
The ISM manufacturing index rose last month to 58.4 from 54.9 in December. The increase was better than the 55.5 reading economists were expecting, according to consensus estimates from Briefing.com.
A report on personal income showed an increase of 0.4% for December, versus a forecasted 0.3% increase. Personal spending edged up 0.2% in December, falling short of the 0.3% increase forecast.
Meanwhile, Royal Dutch Shell (RDS.A) said a pipeline in Nigeria was attacked over the weekend, resulting in a shut-down of production at three pumping stations in Africa's biggest exporter of crude oil.
It was not clear who was responsible for the attack, but the Movement for the Emancipation of the Niger Delta, or MEND, has reportedly ended a cease-fire declared last year.
Dan Flynn, an energy analyst at PFG Best in Chicago, said traders are also responding to President Obama's decision over the weekend to deploy ships to the Persian Gulf to defend against a possible Iranian missile attack.
Separately, Exxon Mobil (XOM, Fortune 500) reported quarterly earnings that beat analysts' expectations, even as the energy conglomerate's profit fell by 23% from a year ago.
The dollar eased against a basket of other international currencies. The dollar index (DXY) was down 0.3% to 79.23.
A softer dollar typically supports prices for commodities that are priced in the U.S. currency, such as crude oil.
What analysts are saying: "The equity markets are taking today's economic reports in a positive light and that's also a factor in the petroleum market," said Andrew Lebow, an energy analyst at MF Global in New York.
Many traders view the stock market as a leading indicator of economic activity and potential energy demand. As a result, oil prices often rise in tandem with stocks.
But fuel demand remained weak in January, which weighed on the market last week, Lebow said. "Today, the economic news is clearly a supporting factor." 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.89% | 3.88% | |
| 15 yr fixed | 3.21% | 3.21% | |
| 5/1 ARM | 2.87% | 2.88% | |
| 30 yr refi | 3.96% | 3.96% | |
| 15 yr refi | 3.30% | 3.29% |
Today's featured rates:
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 12,801.23 | -89.23 | -0.69% |
| Nasdaq | 2,903.88 | -23.35 | -0.80% |
| S&P 500 | 1,342.64 | -9.31 | -0.69% |
| Treasuries | 1.97 | -0.08 | -3.81% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 8.07 | -0.11 | -1.34% |
| General Electric Co | 18.88 | -0.26 | -1.33% |
| Cisco Systems Inc | 19.90 | -0.10 | -0.52% |
| Ford Motor Co | 12.44 | -0.25 | -1.97% |
| Frontier Communicati... | 4.04 | -0.10 | -2.42% |
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