Oil moves past $80-a-barrel mark

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The price of oil breached $80 a barrel on Tuesday, a new high for the year, boosted by the weak US dollar and strong US company results.

As the markets closed, US light crude fell back 52 cents to $79.09 a barrel. London Brent lost 53 cents to $77.24.

Oil prices rose as encouraging US company results fuelled optimism for the global economic recovery.

Analysts said the short-term direction of oil is being driven by the dollar and rising equity markets.

"I think we will continue higher as we move into the fourth quarter. Investors think equity earnings are a good guide for the economic outlook so the better-than-expected reporting season is supporting [the oil price]," said Mark Pervan at ANZ.

But there are concerns that sentiment, rather than fundamentals, are driving the oil price, and that once these fundamentals re-establish themselves, the price may fall.

These include spare capacity, stock piles of oil and weak demand among industrialised nations.