Oil climbed back to $68 a barrel today on rising tension over oil-rich Iran's nuclear programme and continuing supply disruptions in Nigeria.
With European and Asian finance ministers predicting accelerating world economic growth there was no sign slackening demand would ease prices from 25-year highs in real terms.
US crude rose 1 per cent or 81 cents to $68.20 by 2:14pm , approaching last week's 10-week high and August's $70.85 record. London Brent was up 77 cents at $68.06.
Oil has risen 11 percent this year, continuing a rally that began at the start of 2002 with oil at $20. Investment money has poured into commodities. Gold matched a 25-year high, silver spiked to a 23-year peak and copper hit a record.
"Geopolitics is playing a key role in pension/mutual funds' motivation to invest in oil. They perceive geopolitics not as trading opportunities but as risks," analysts said.
The United States said yesterday its priority was to seek a diplomatic solution to the dispute with Iran, but it did not rebuff a report in New Yorker magazine that it had stepped up military planning.
Uncertainty about the return of around 500,000 barrels per day of high-quality Nigerian oil, shut since February by rebel attacks, is also supporting prices.
The loss of gasoline-rich Nigeria oil looks likely to extend into the US summer driving season, the period of peak motor fuel demand in the world's top consumer.