London: Oil hit an 18-month high yesterday, breaking up above previous trading ranges and drawing in fresh inflows from investors at the start of the new quarter.
The move came despite a stronger dollar, which often dampens enthusiasm for commodities, and after news of yet another build in US crude oil inventories.
US crude for May delivery rose 70 cents to $84.46 (Dh310.1) a barrel by 9.58am GMT, after hitting an intraday high of $84.62 and settling at $83.76 a barrel on Wednesday, the highest close since October 2008.
London ICE Brent climbed 73 cents to $83.43.
Crude oil futures will not trade today in either New York or London because of the Easter holiday.
Oil prices dipped briefly on Wednesday after government data showed US crude inventories rose by 2.9 million barrels to 354.2 million barrels last week, their ninth straight gain. Gasoline stockpiles logged a modest but unexpected gain.
However, the market soon returned to strength.
"We suspect that with the dollar no longer rallying, [at least for now], commodity markets have been able to build a head of steam. In addition, simmering geopolitical tensions could also be at work," said Edward Meir at brokers MF Global.
He said talk of a possible new round of sanctions against Iran, maybe within weeks, could be underpinning the market.
But he added a note of caution: "With respect to short-term pricing trends, we suspect there might be a temporary pause in the rally. Although the market will likely take this level out given the way it has been trading of late, we still would caution against joining this latest advance, tempting as it might be."
