Oil prices rise amid signs of boost in demand

Oil prices today 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.

Mohammad Ali Khatibi, Iran’s governor to the Organisation of Petroleum Exporting Countries, said yesterday he expected crude prices to reach $80 a barrel by January.