World oil prices surged close to $84 a barrel today, hitting the highest level since October 2008, in response to the falling dollar and weaker than expected US jobs data.
However, the market trimmed gains following news of increasing crude oil and petrol reserves in the US, which indicated lower demand in the world's biggest energy consuming nation.
New York's main contract, light sweet crude for delivery in May, soared as high as $83.76 - a level last seen on October 9, 2008. It later stood at $82.48, up 11 cents from yesterday's closing level. London's Brent North Sea crude for May advanced 18 cents to $81.46 a barrel.
The US economy shed 23,000 private-sector jobs in March, payrolls firm ADP said in a report that was dramatically worse than market expectations for the creation of some 40,000 jobs.
March's job losses were lower than in February when a revised 24,000 jobs were shed. Analysts said that the data indicated that Friday's upcoming nonfarm payrolls data may also disappoint.
The market pared gains after the US government's Department of Energy (DoE) announced that crude inventories rose by 2.9 million barrels in the week ending March 26. Market expecations had been for a gain of 2.1 million barrels.
The Department of Energy added that petrol reserves increased by 300,000 barrels last week. Analysts had pencilled in a drop of 1.3 million barrels.
US employment data is being closely watched worldwide because American consumers are a major driver for global growth.
Meanwhile, energy producers and oil consuming nations refined plans today for better dialogue to ease price volatility as a global forum wrapped up talks in Mexico.
The International Energy Forum concludes two days of talks in the beach resort of Cancun that have also centred on the outlook for renewable energy sources such as biofuels.
OPEC head Abdalla Salem El-Badri said the IEF declaration would call for 'improving the dialogue between the producers and consumers' over tackling excessive oil price volatility.
The head of the Organisation of Petroleum Exporting Countries - whose member nations together pump 40% of the world's oil - blames speculators for pushing crude futures to record highs nearly two years ago.
Oil surged to all-time peaks of above $147 a barrel in July 2008, before the severe global economic downturn saw them crashing to just $32.
