Page last updated at 20:36 GMT, Monday, 11 January 2010

Oil price touches 15-month high on demand from China

Oil pump

Oil prices have fallen back late on Monday after hitting a fresh 15-month high of nearly $84 a barrel.

US crude oil for February delivery was at $82.52 a barrel, after earlier touching $83.95 - the highest price since October 2008.

In London, Brent crude fell 40 cents to settle at $80.97 a barrel.

The gains had been mainly fuelled by positive economic news from China, which showed that demand for oil there had jumped by 25% in December.

China is the world's second-largest energy consumer.

The prolonged cold spell in the US and Europe also added to the upward pressure on oil prices.

Another factor was a fall in the value of the dollar, something that flatters the price of commodities priced in that currency.

For investors holding other, stronger, currencies, weakness in the dollar makes items with a dollar price tag cheaper.

The price of oil is still well below its record high of more than $147 a barrel, which it hit in the summer of 2008.

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