Kate Mackenzie Markets: Oil hits six-month high

Javier Blas reports from Vienna:

Oil prices on Friday rose above $66 a barrel, setting a fresh six-month high and heading for their biggest monthly gain in more than 10 years, following Opec’s upbeat comments about oil demand in Asia at its meeting this week.

Abdalla El-Badri, Opec’s secretary general, said prices could rise to $70-$75 a barrel by the end of the year. “The outlook is improving,” Mr El-Badri said over breakfast. But added: “The fundamentals are still weak.”

Mr El-Badri was explaining Opec’s decision on Thursday to keep its production unchanged, betting that the strengthening of the global economy will push prices.

In early trading on Friday, West Texas Intermediate, the US benchmark, rose to $66.01. WTI has risen 29.1 per cent this month and is on course for its best month since March 1999, when it gained 36.5%. Oil has risen 48 per cent so far this year. Brent, the European crude benchmark, was 74 cents higher at $65.13 after touching a six-month peak at $65.19 a barrel.

Meanwhile Izabella Kaminska compare’s today’s oil moves with a similarly-shaped fall in the dollar.

Related stories:
Commodities report (FT, 29/05/09)