Crude rises to an eight-month high on hopes the global downturn is easing

OIL climbed above $72 a barrel yesterday, an eight-month high, after research body the International Energy Agency (IEA) raised its global forecast on rising hopes the economic recession is easing.

Paris-based IEA, which advises 28 nations, boosted its global estimate for daily oil demand by 120,000 barrels to 83.3 million barrels in its monthly report. The gain was driven by the US and China.

The IEA said: “These revisions do not necessarily imply the beginnings of a global economic recovery, and may only signal the bottoming out of the recession.”

It was the first time the IEA had upped its oil forecasts since last August.

Crude oil for delivery in July rose $1.05 to $72.38 a barrel on the New York Mercantile Exchange.

In London Brent crude gained $1.00 to $71.80. Oil prices have risen 62 per cent this year.

Analysts said oil also advanced on US data showing an increase in retail sales in May and a slowdown in weekly jobless claims reinforced perceptions that the deterioration of the world’s biggest economy was easing. The US uses 22.5 per cent of the world’s crude.

Yesterday BP chief executive Tony Hayward said that global oil consumption in the developed world fell by 1.6 per cent last year, a trend that is set to continue.