US crude futures rose above $69 a barrel today, but traded below seven-month highs hit in the previous session, drawing strength from positive US jobs data, a rally in stock markets and a weaker dollar.
The oil market added to gains of 4 per cent in the previous session on rising hopes for a recovery in oil demand following data showing the number of US workers filing new claims for jobless benefits fell for a third straight week.
US crude for July delivery was trading 37 cents higher at $69.18 a barrel by 2am after peaking at $69.45. The market hit $69.60 a barrel a day earlier -- its highest level since early November. London Brent gained 21 cents to $68.92.
But the market is still trading 53 per cent below the record high of more than $147 hit in mid-July last year.
US investment bank Goldman Sachs said yesterday a potential economic rebound alongside production cuts by the OPEC cartel could propel crude to $85 a barrel by the end of the year and to $95 a barrel by the end of 2010.
Opec seaborne oil exports, excluding Angola and Ecuador, will rise 250,000 barrels per day (bpd) in the four weeks to June 20th, said an analyst who tracks future shipments.
Supply unease may also be fed by news that Venezuela is readying to nationalise petrochemical projects as it steps up a drive to put key industries in state hands.
The US dollar inched down against a basket of major currencies today, with investors shifting money to higher-yielding currencies from the safe-haven dollar on views the global recession is easing.
The dollar index, a gauge of the greenback's performance against a basket of six currencies, slipped 0.2 per cent to 79.353.