Oil prices rose to a six-month high above $63 a barrel this afternoon after Saudi Arabia, OPEC's biggest member, said the global economy had strengthened enough to cope with oil at $75-$80 a barrel.
Ahead of a meeting of the Organisation of Petroleum Exporting Countries in Vienna tomorrow, Saudi Oil Minister Ali al-Naimi said oil prices would continue to rise, recovering from lows near $32 at the turn of the year.
'The price rise is a function of optimism, better things are coming in the future,' Naimi said in Vienna.
The minister said OPEC did not need to change its output policy, which has already seen the group agree to remove 4.2 million barrels a day of oil from the market in a bid to shore up prices battered by recession.
And Iranian Oil Minister Gholam Hossein Nozari said today he expects OPEC to keep its oil output target steady when the oil exporter group meets tomorrow.
US crude oil for July delivery rose $1.25 to $63.70 a barrel this evening, after hitting $63.82, the highest level since mid-November. London Brent crude rose $1.37 to $62.61 a barrel.
Global oil demand is seen falling this year at the fastest rate since 1981, with the International Energy Agency, adviser to 28 industrialised nations, predicting a decline of 2.56 million barrels a day.
Crude inventories have risen to around 62 days of forward cover, but expectations of a slight drawdown in US crude inventories are supporting prices, analysts said.
