US oil prices rose nearly 5% to a seven-month high this evening after US data showed a fall in jobless claims, raising expectations of an economic recovery and increased demand for oil.
Oil was also supported by a forecast from US investment bank Goldman Sachs that prices would hit $85 a barrel by the end of the year. US crude rose $3.20 to $69.32 a barrel, the highest since early November. London Brent crude gained $3.14 to $69.02 a barrel.
Oil prices rallied earlier after Goldman Sachs raised its oil price forecast for end of 2009 to $85 a barrel from $65 and introduced a new forecast of $95 for the end of 2010.
Oil had closed more than $2 a barrel lower on Wednesday, following a report by the US Energy Information Administration that US crude inventories rose by 2.9 million barrels, against expectations for a decline of 1.4 million barrels.
Saudi Oil Minister Ali al-Naimi has said the producer group OPEC would wait until crude inventories fall to around 53 days of forward cover - nearly 10 days below current levels - before considering raising output.
