Crude oil prices rose above $71 a barrel yesterday for the first time in seven months and will soon test the $80 a barrel level, industry analysts said yesterday. West Texas Intermediate light crude for July delivery rose to a high of $71.79 a barrel before pulling back slightly to trade up $1.12 at $71.13 on the New York Mercantile Exchange. In London, North Sea Brent crude gained 95 cents to $70.57 a barrel. Analysts said investors were also pouring money into the commodity as a hedge against a recent weakening in the dollar. Gerard Rigby, an energy analyst with Fuel First Consulting, commented: “I wouldn’t be surprised if we’re testing $80 in a week or two. The momentum right now is too strong.” The latest rally came after the US Energy Department predicted that average oil prices could rise to $67 a barrel in the second half of 2009 – about $16 higher than the first six months of the year and significantly stronger than the £55 a barrel it forecast a month ago. The department’s Energy Information Administration also said global consumption of crude, which has fallen by nearly two million barrels of oil a day this year, will begin to rebound in 2010 as the global economy recovers.

With oil prices doubling from below $35 a barrel in March, UK motorists have seen a return of average petrol prices in excess of £1 a litre.  Meanwhile, oil company BP said the world’s proved oil reserves fell in 2008, the first drop in a decade. Proved reserves of 1.258 trillion barrels in 2008 was three billion barrels less than in 2007, the company said.

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