Oil prices hit $60 a barrel today for the first time in six months, boosted partly by a weak dollar and gains on equity markets.
US crude was up $1.32 a barrel at $59.82 a barrel by 1.52pm. It earlier touched $60.08 a barrel, its highest since November last year. It has risen about 20 per cent this month.
London Brent crude was up $1.16 at $58.64 a barrel. The U.S. dollar fell to a four-month low, helping oil, which is priced in dollars and tends to rise when the dollar falls.
Gains in equity markets have also driven oil higher.
"Oil is riding the coat-tails of the equity market bounce for now, largely ignoring the build-up in oil inventories," said Harry Tchilinguirian, senior oil analyst at BNP Paribas.
"Weakness in oil fundamentals is reflected in elevated inventories, yet the market's price assessment appears to have brushed this aside."
The global economic downturn has hit demand for oil, which has created a massive supply overhang.
There is an estimated 100 million barrels of crude oil stored at sea on tankers. US crude inventories are at their highest in 19 years.
But a rally in global equity markets this month in anticipation that the economic climate might improve has boosted oil despite its bearish supply/demand picture. The dollar has also played a part.
"The US dollar is slightly weaker which could be spurring a bit of strength," said Tony Machacek at Bache Commodities. Oil, which is priced in dollars, tends to rise when the dollar falls.
The global downturn has pushed oil down from a record high above $147 a barrel hit last July to a low in December of $32.40.
Prices have rebounded this year. US crude is up more than 80 per cent from a January low of $32.70 a barrel.