Oil hit new seven-month highs on economic hopes

5 June 2009

Crude oil prices soared to new seven-month highs on Thursday as analysts predicted that values could reach as much as $85 (£53) a barrel by the end of this year.

US crude for July delivery settled at $68.81 a barrel, up $2.69 on the previous day, while London Brent crude rose by $2.83 to close at $68.71 a barrel.

The gains came on the back of further evidence that the US economy could be stabilising after the recent crisis, with government figures showing a drop in the number of people filing for jobless benefits.

Meanwhile, US investment bank Goldman Sachs revised upwards its oil forecasts, predicting that crude prices could reach as much as $85 a barrel by the end of this year and $95 by the end of 2010.

This could prompt some home heating oil customers to stock up on supplies of the domestic fuel now in order to avoid the impact of any further increase in crude prices in the coming months.

Opec secretary general Abdullah al-Badri recently told Reuters that he expects prices to reach as much as $90 in 2010 as the global economy picks up.

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