Oil price rises above $81 level

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The price of oil has risen above $81 a barrel, a new high for the year, as hopes rise that the global economic recovery is picking up pace.

US light crude rose to $81.43 a barrel, before slipping back to $80.50. London Brent also climbed before dropping back to $78.82 a barrel.

The price was boosted by figures released on Thursday showing China's economic growth had accelerated.

But a strengthening dollar caused the price to fall in afternoon trading.

The price of oil has risen in recent weeks, largely on the back of strong company results in the US which have fuelled optimism for the global economic recovery.

But there are concerns that sentiment, rather than fundamentals, is 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.