NEW YORK — Oil hit a fresh 18-month high yesterday as upbeat US economic data prompted fresh fund buying at the start of the new quarter and the dollar weakened against the euro and a basket of currencies.
US crude for May delivery climbed $1.46 to hit $85.22 a barrel, the highest intraday price since October 9, 2008, before slipping back to around $85 by 12 pm EDT. The contract had settled at $83.76 on Wednesday, its highest close since October 2008.
London ICE Brent climbed $1.63 to a high of $84.33 before easing a little to trade around $84.10. Prices were up for a fourth consecutive session as traders saw the improving outlook on economic recovery as a sign of better oil demand ahead.
The dollar shifted lower against a basket of currencies, a factor that usually encourages commodities buying. The dollar rose against the euro.
Oil markets have ignored Wednesday’s government report of the ninth consecutive weekly build in US crude stocks, and a surprise, if small, rise in gasoline supplies.
“Many are looking at the fact that total implied refined product demand is now in positive territory versus both last year and the five year average for the same week,” Dominick Chirichella, senior partner, Energy Management Institute in New York, said.
After swings in the past two years, oil has stabilised recently near the range favoured by members of the Organisation of the Petroleum Exporting Countries between $70 and $80.