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Oil price hits six-month high of $83.45

2010-11-02 13:31:59

1 November 2010 Last updated at 18:42 GMT

Oil well Many analysts expect the oil price to continue rising

The price of oil has hit a six-month high after encouraging manufacturing data

in the US and China boosted confidence in the global recovery.

US light crude oil rose by $2 a barrel or 2.5%, to $83.45, while London Brent

rose by $1.90 to $85.04 a barrel, before both slipped back slightly.

Figures showed that the US manufacturing sector accelerated faster than

expected in October.

Earlier, figures showed Chinese manufacturing powering ahead.

China's official purchasing managers' index (PMI) rose to 54.7 in October from

53.8 in September, well above analysts' expectations.

In the US, the equivalent manufacturing PMI also rose to a higher-than-expected

56.9, up from 54.4 in September.

Index figures above 50 suggest expansion of the sector.

The data also helped to push global stock markets higher.

'Comfort zone'

Comments by Saudi Arabia's Oil Minister Ali al-Naimi also helped to boost the

price of oil to its highest level since 3 May.

"I would say we are in a very comfortable zone that should continue for some

time," Mr al-Naimi said.

"Producers, consumers and companies are all very happy with this price."

Analysts said that Mr al-Naimi's words comforted oil traders as they "give

assurance that the Saudis won't do anything to prevent a further rise above

$80, at least until prices exceed $90," said Carsten Fritsch at Commerzbank.