Oil prices have climbed above $70 a barrel amid further signs that a global economic recovery will boost demand.
Benchmark crude for September delivery rose to $70.18 a barrel in Singapore and is expected to test its eight-month high of $73.23 in coming days.
The rally comes after strong gains on global stock markets in recent weeks amid positive economic data, including better-than-expected US growth figures.
Victor Shum, an energy analyst with Purvin & Gertz in Singapore, said: “Optimism for economic recovery is fighting the weak fundamentals and right now the optimism is holding the upper hand.”
Oil prices have almost doubled from below $35 a barrel in March as investor optimism grows that the US recession could be slowing.
The figure peaked at $147 in July of last year.
Forecourt costs have followed suit, with motorists seeing the average price of a litre of unleaded petrol edge up to £1.02 last week.
Mohammad Ali Khatibi, Iran’s governor to the Organisation of Petroleum Exporting Countries, said he expected crude prices to reach $80 a barrel by January.
The latest gain in oil prices brings oil within sight of the 2009 high of $73.38 set in June, though some see resistance that prices could struggle to rally beyond.
“I feel that the market has gathered so much momentum and crude may be overpriced at this point,” said Phil Flynn, analyst at PFGBest Research, Chicago.
