Oil rose to near $146 a barrel today, rebounding after an earlier dip prompted by the restart of some production in major African oil exporter Nigeria.
Concern about the dispute between Iran and the West over Tehran's nuclear work, a weakening US dollar and a gathering storm in the Atlantic supported prices - as did a bullish picture based on past price moves.
"Technically, the recovery towards the end of last week and the strength we saw yesterday still keeps the bull trend very much intact," said Christopher Bellew, a broker at Bache Commodities.
US crude was up 99 cents at $146.17 a barrel by 12.21pm, within sight of its all-time high of $147.27 hit last week. London Brent crude was up $1.08 at $145.
OPEC cut its forecast for global oil demand growth in 2008 for a fourth time this year and said consumption would slow in 2009, signalling a more comfortable supply and demand balance.
The 13-member group, source of two in every five barrels of oil, also said the need for its oil in 2009 would post the first significant decline since 2002 due to slower world demand and rising supply from non-member countries.
Oil eased earlier in the session as Chevron said production has been restored at the 120,000-barrel per day Escravos pipeline in Nigeria, resolving one of the disruptions that have cut the country's supply.
Traders were also keeping watch on an oil workers' strike in Brazil which started yesterday. State-run energy firm Petrobras said it had already reversed most of the production losses on its platforms.
Crude has risen from $20 a barrel in January 2002 on growing demand from nations like China and rising cash inflows into commodities from investors seeking to hedge against inflation and the weak dollar.
The euro hit a three-month high versus a broadly weaker dollar today and investors said renewed weakness in the US currency could support oil.
"The financial crisis is not over, we are not optimistic, the dollar should get weaker and we should see more investor money turn to commodities and energy," said Tetsu Emori, fund manager at Astmax Co in Tokyo.
Traders were also keeping watch on a low-pressure weather system about 1,200 miles (1,931 km) east of the Lesser Antilles which may develop into a tropical depression.