Oil prices rose this evening as strong US housing data put pressure on the US dollar and lifted expectations that an economic rebound will help demand for fuel.
Oil markets have looked toward broad economic data this year for signs of an economic rebound that could boost flagging fuel demand.
US crude traded up 74 cents to $78.21 a barrel, off earlier highs of $79.92. London Brent crude rose 95 cents to $78.15.
Further strength came as the positive economic data prompted investors sell the US dollar for risker plays in stock markets and commodities. Investors have been buying into commodities in a bid to hedge against the dollar's weakness and to guard against concerns that ultra-easy monetary policy could lead to a jump in inflation as the world's economy recovers.
Meanwhile, a monthly report from the Centre for Global Energy Studies said world oil demand rose between July and September after falling during the previous six quarters.
The London-based CGES added that global oil demand was set to record its first year-on-year gain since Q2 2008 during the fourth quarter, although crude oil prices should continue to trade between $70 and $80 a barrel.
'Oil demand finally seems to have turned the corner,' the consultancy said in its November study. CEGS said rising oil demand might be expected to provide a boost to oil prices, but non-OPEC oil supplies were also growing, helping to keep the market in balance.
