Page last updated at 21:32 GMT, Wednesday, 27 May 2009 22:32 UK

Oil price reaches six-month high

Oil well in Bahrain
Oil prices are recovering but remain far below the peak of $147

Oil prices have risen to a six-month high, above $63 a barrel, after key oil producing nation Saudi Arabia said it was optimistic about economic recovery.

Saudi oil minister Ali al-Naimi said prices would keep increasing since demand was "picking up".

US light crude oil settled up $1 to $63.45 a barrel, its highest price since November. Brent crude rose $1.26 to settle for the day at $62.50.

The comments come as members of oil cartel Opec decide on output levels.

Mr al-Naimi said the members did not not need to alter production levels to buoy prices.

"There is no need to cut production," he told reporters, saying that the cartel should "stay the course".

He predicted that prices were likely to reach $75 a barrel by the end of the year, boosted by demand in Asia.

But there is still much uncertainty about the trend in oil prices, as there is about the wider economy.

"We're not really seeing a strong recovery yet, but I think Opec are implying they don't see oil demand falling any further," said Andrey Kryuchenkov, an analyst with VTB.

And despite recent rises, oil remains far from the peak that it reached last July, of more than $147 a barrel.



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