THE price of oil has been on the march again as demand rises on the back of global economic recovery – but experts have predicted that the price should stabilise after reaching the top end of expectations.
Positive economic data from the US last week saw the price of crude oil rise above $86 a barrel – raising the possibility of more hikes at UK petrol pumps.
Petrol prices hit a record high just short of 120p-a-litre on average for unleaded fuel.
Oil had fluctuated between $69 and $84 for about nine months before shooting up to a high of $87.
The latest oil price jump was triggered after US retailers – including department store Macy’s – showed that average sales were up by nine per cent.
Crude was also buoyed by investor forecasts that China might allow its currency to rise.
That would make dollar-pegged commodities such as oil cheaper for investors with yuan and might increase demand.
Growing demand from China and India and the economic recovery in the United States is also expected to lead to upward pressure on petrol prices.
There are also fears that the global economic recovery could trigger another wave of speculation in crude oil, forcing prices up even further.
The price of crude oil had peaked at $147 a barrel – around $60 more than the current level in 2008.
However, analysts do not see that “bubble” being repeated any time soon.
Simon Hawkins, oil analyst at Edison, said: “There is not the speculative bubble that there was when the prices shot up last time.”
Meanwhile the rising price of oil sent the inflation rate on goods leaving UK factories up by it its fastest pace in 16 months during March, the Office for National Statistics said.