Oil price jumps on recovery hopes

The price of oil has jumped sharply to above $75 a barrel as rising stock markets helped to boost confidence in the global economic recovery.

US light crude rose by more than $2, or 3%, a barrel, to $75.90, before slipping slightly. Brent was up $1.8 a barrel to $76.13, before falling back.

Strong eurozone industrial production figures helped to push stocks higher in Europe and, initially, in the US.

But US stocks fell back after Moody's rating agency downgraded Greek debt.

This caused the oil price to lose some of its earlier gains.

The eurozone data also helped push the euro up 2 cents against the dollar, to $1.2252.

Against the pound, it was slightly stronger at 83.108 pence.

Eurozone industrial production rose by 0.8% in April, official figures showed, a much stronger rise than had been expected.

This helped to push leading French shares up almost 2%, German shares up more than 1% and UK shares up 0.7%.

In morning trading, leading US shares also rose by 1%, before slipping after Moody's, one of the three main international credit rating agencies, downgraded Greek government debt.

They ended the day down 20 points, or 0.2%, at 10,191.

Analysts said the oil price could keep rising as supply falls in the coming months.

This is in part due to seasonal demand and in part due to measures introduced in the US in response to the recent BP oil spill in the Gulf of Mexico, they said.

"With the US drilling ban likely to hit supplies from the third quarter onwards and demand expected to rise seasonally between now and August, we feel that seasonality and fundamentals are moving towards a price rebound," said Lawrence Eagles at JP Morgan.