LONDON (Reuters) – Oil hit a fresh record high of $75.78 a barrel on Friday after a U.S. government report showed strong fuel demand in the world’s top oil consumer.
Prices also drew support from international tensions ranging from Iran’s nuclear ambitions to North Korea’s missile tests. Adjusted for inflation, oil is more expensive now than at any time since 1980, the year after the Iranian revolution.
Gasoline demand in the United States gained by 1.4 percent in the last four weeks from a year ago, a government report said on Thursday. U.S. payroll data released on Friday showed jobless figures stayed at a five-year low in June, underscoring the strength of the world’s biggest economy.
Investors doubt oil’s 4-1/2 year rally is coming to an end.
“While the global economy is staying strong, demand is going to be very supportive,” said Tony Dolphin of Henderson Global Investors, which manages more than 67 billion pounds.
“I don’t see oil falling back a lot. I think it is likely to remain in a range and perhaps gradually drift higher.”
U.S. crude was up 41 cents at $75.55, having earlier hit an all-time high of $75.78. London Brent crude rose 79 cents at $74.87, having earlier hit a record $75.09.
Oil in New York has surged from $20 at the start of 2002 and is up 24 percent this year, boosted by supply cuts in Nigeria, the dispute over Iran’s nuclear program and a flood of investment fund money into commodities.
Prices initially fell on Thursday after the U.S. government report showed a surprise 700,000-barrel increase in gasoline stocks, only to bounce back on signs of resilient demand.
“The market has decided to totally shake off the gasoline build,” said analyst Deborah White of Societe Generale. “Gasoline demand is quite strong.”
The United States uses 40 percent of the world’s gasoline and a quarter of its crude oil supplies.
Rebel attacks in Nigeria have shut almost a quarter of the country’s output and the Iranian nuclear row has raised fears of supply cuts from the world’s fourth-largest exporter.
The European Union said talks with Iran over the Islamic state’s nuclear program late on Thursday were constructive and laid the basis for a fuller response by Tehran next week.
“It’s a good start for what we expect will be a positive meeting on July 11,” Cristina Gallach, spokeswoman for EU foreign policy chief Javier Solana said of his two-hour meeting with Iran chief nuclear negotiator Ali Larijani.
In Nigeria, the world’s eighth-largest oil exporter, gunmen on Thursday abducted a Dutch man who was working on an unfinished Shell plant.