Oil prices won back earlier losses this evening after Saudi Arabia said oil demand was picking up and in response to positive US consumer confidence data.
US crude rose three cents to $61.70 a barrel, while London's Brent North Sea crude added 50 cents to $60.71. Oil has nearly doubled in price since December, buoyed partly by expectations of increased demand if the world economy recovers.
Saudi Arabian oil minister Ali al-Naimi said there was already a slight 'uptick' in fuel consumption. Naimi, speaking to journalists ahead of Thursday's OPEC meeting in Vienna, also said he hoped oil prices would hit $75 a barrel between the third and fourth quarters of this year.
A key indicator of US consumer confidence provided further evidence of a potential economic recovery, with the Conference Board's consumer confidence index rising in May to 54.9.
Expectations are that OPEC will not change its output targets when it meets to review them this week. The Organisation of Petroleum Exporting Countries has already pledged to curb output by 4.2 million barrels per day since September.
Saudi Arabia has also warned that oil prices could spike up to the $150 record peak reached in 2008 within three years as it joined other energy leaders in calling for more investment to boost oil output over the long term.
France wants an end of price volatility
France will submit plans to world leaders at the G8 summit in July to try end oil price volatility, President Nicolas Sarkozy said today during a visit to the energy-rich United Arab Emirates.
'We have to work together to fight oil price volatility. The volatility of oil prices is not in anyone's interests,' Sarkozy said.
Oil prices have swung wildly, slumping from a peak of $147a barrel in July to about $32 in December as demand for the fuel slumped due to the global economic downturn.
Sarkozy said the French proposals would be presented to the G8 when the club of rich nations - which groups France with Britain, Canada, Germany, Japan, Italy, Russia and the US - holds its next summit in Italy from July 8 to 10.