Oil prices have risen to their highest level in six months, buoyed by hopes the worst may be over for the world economy and demand for oil may recover.
US crude rose as high as $60.08 a barrel before falling back, while London Brent crude rose to $58.64.
The price of US crude is now up by about 80% from a January low of $32.70 a barrel, but is well below the record high above $147 hit in July last year.
Oil has risen in response to a global rebound in stocks.
Weakness in the dollar has also spurred the oil price, which tends to rise when the dollar falls. The dollar hit a four-month low against a basket of currencies on Tuesday.
"The feeling is we've seen the worst of it, and the only way now is up," said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney.
However, despite the optimism there is so far scant evidence that demand for oil is recovering.
Oil supply is also ample. There is an estimated 100 million barrels of crude oil stored at sea on tankers and US crude inventories are at their highest in 19 years.
But the recent stock market rally has sparked hopes that the world economy is recovering and thus investors are betting that demand for oil will recover soon.
Story from BBC NEWS:
Published: 2009/05/12 18:18:26 GMT