Oil prices jumped above $US70 a barrel Monday in Asia on investor expectations a recovering global economy will boost crude demand.
Benchmark crude for September delivery was up 73 cents to $US70.18 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, the contract rose $US2.51 to settle at $US69.45.
Oil prices seesawed last week before surging Thursday and Friday as investors bet that crude demand, which has been tepid this summer, will eventually pick up as the economy improves.
"Optimism for economic recovery is fighting the weak fundamentals, and right now the optimism is holding the upper hand,'' said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Crude also has followed gains in global stocks. Most Asian indexes were up in early trading.
Prices may test an eight-month high of $US73.23 a barrel in the coming days, but dismal consumer sentiment in the US will likely weigh on demand and send prices back into the $US60s, Shum said.
"It will be difficult for oil prices to sustain in the $US70s given the weak fundamentals,'' he said.
Mohammad Ali Khatibi, Iran's governor to the Organisation of Petroleum Exporting Countries, said Sunday he expects crude prices to reach $US80 a barrel by January, the oil ministry said.
In London, Brent prices rose 58 cents to $US72.28 a barrel on the ICE Futures exchange.
AFP
