Oil prices have risen again, capping a week of strong gains which saw US light crude close at 13-year highs on security worries after the Madrid bombings and concern over US gasoline supply this summer.
Benchmark US light crude futures settled 15 cents higher at $38.08 a barrel. It rose as high as $38.50 during New York trade, and traders said they expected a test of $40 a barrel before long.
London Brent ended up 13 cents at $33.26, after hitting a trading high of $33.38 a barrel.
US light crude prices jumped more than 4 per cent this week and have averaged $35 a barrel in 2004, well above the $31 average in 2003, which was the highest in more than two decades.
Last week's Madrid bombings have sparked fears of attacks that could disrupt oil supplies and inflated a "risk premium" in crude prices.
"It's no wonder that the overwhelmingly sentiment amongst speculative interest in the market is long, as they bet the price breaches the $40 mark," Société Générale said.
Soaring Chinese demand and low US fuel inventories ahead of the peak US driving period - late May to early September - have helped fire the rally.
The US's energy information administration said on Wednesday that gasoline stocks dropped 800,000 barrels last week to stand 5 per cent below the five-year average. - (Reuters)
