Oil prices surged to their highest since July 2015 on Monday as Saudi Arabia's crown prince cemented his power with a crackdown on corruption, while shares worldwide were little changed and key currencies stayed in tight ranges.

Oil prices rose 3.5 per cent on Monday, hitting the highest since early July 2015, with Brent crude futures settling up US$2.20, or 3.5 per cent, to US$64.27 per barrel. U.S. West Texas Intermediate (WTI) crude rose US$1.71, or 3 per cent, to US$57.35 a barrel.

Both benchmarks were at their highest since early July 2015.

Prince Mohammed's reforms include a plan to list parts of state-owned oil company Saudi Aramco next year, with higher oil prices seen as beneficial for the market capitalization of the future listed company.

The news spurred concerns of Middle Eastern money pulling out of global financial markets. A weekend call by China's central bank governor for tougher financial regulation also hit global investor sentiment.

The MSCI world equity index, which tracks shares in 47 countries rose 0.2 per cent.

The pan-European STOXX 600 closed 0.13 per cent higher. Saudi Arabia's own stock market fell as much as 1.5 per cent before ending 0.1 per cent higher, boosted in part by buying by government-linked funds.

Sentiment towards the U.S. dollar was still positive with leveraged funds paring bearish bets to be net long for the first time since late July. 

"There is some ongoing adjustment in market expectations on the dollar's outlook on the progress of the U.S. tax bill and on the ongoing Saudi situation but market moves have been in narrow ranges," said Alberto Gallo, head of macro strategies at Algebris Investments in London.

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 U.S. stocks climbed to record highs on Monday amid optimism about merger activity and as investors bet that a Republican plan to cut corporate taxes would bolster earnings.

The Dow Jones Industrial Average rose 9.23 points, or 0.04 per cent, to 23,548.42, the S&P 500 gained 3.29 points, or 0.13 per cent, to 2,591.13 and the Nasdaq Composite added 22.00 points, or 0.33 per cent, to 6,786.44. 

The U.S. dollar was little changed after investors took profits on its best weekly performance this year, with wariness about the status of the U.S. economy and tax reform plans setting the tone.

Facing pockets of discontent in their own Republican ranks, tax negotiators in the U.S. House of Representatives will seek to bridge differences over their far-reaching tax bill and stick to a self-imposed deadline of passage this month.

The index that measures the greenback against a basket of currencies fell 0.18 per cent, with the euro up 0.02 per cent to US$1.1609.

The Japanese yen strengthened 0.19 per cent versus the greenback at 113.85 per dollar, while sterling was last trading at US$1.3153, up 0.60 per cent on the day.

The spread between two-year and 10-year U.S. Treasury yields was the narrowest in more than a decade as sluggish domestic inflation underpinned demand for longer-maturity government bonds.

Benchmark 10-year Treasury notes were last up 7/32 in price to yield 2.3199 per cent, from 2.343 per cent late on Friday. The Federal Reserve confirmed Monday that William Dudley, one of the most influential monetary policymakers throughout the 2008 financial crisis and its aftermath, expects to retire by mid-2018, leaving the leadership of the U.S. central bank unusually wide open.

The 30-year bond was last up 15/32 in price to yield 2.798 per cent, from 2.822 per cent late on Friday.

Spot gold was up 0.24 per cent at US$1,272.04 an ounce.