Oil prices touched a four-month high over $54 a barrel on Thursday tracking Wall Street as better-than-expected economic data improved investor sentiment. US crude rose $1.57 to $54.34 a barrel after hitting $54.66 a barrel earlier in the session - its highest since November 28. London Brent crude rose $1.71 to $53.46 a barrel.
The uptick in oil prices extended a more than 40 percent climb since mid-February and came as US equities markets rose on data showing a rebound in durable goods and new home sales and a better-than-expected reading of fourth quarter GDP. The gains were limited, however, by rising US oil stockpiles and continued weak demand that some analysts said could eventually threaten another pullback in energy markets.
"Crude is overbought and the market has gotten ahead of itself in terms of fundamentals," said Peter Beutel, president of consultancy Cameron Hanover. "While there are interesting news that seems to lift economic optimism, crude supplies are growing while demand is worsening." A report from the US Energy Information Administration on Wednesday showed nation-wide crude stockpiles up 3.3 million barrels last week to the highest since July 1993.
Oil prices are down about $100 from their peaks near $150 a barrel hit last July as the global economic downturn shrinks world energy consumption for the first time in a quarter century. Weakness in crude oil prices has led the Organisation of the Petroleum Exporting Countries to agree to slash some 4.2 million barrels per day from the world market.