West Texas Intermediate crude hit $115.52 a barrel on the New York Mercantile Exchange during early trading on 17 April, while in London Brent crude surpassed the $113 a barrel level.
Analysts attribute much of the price pressure to the latest weekly figures published by the US Energy Department, which said inventories of gasoline fell by 5.5 million barrels for the second week of April, a much larger decline than forecast.
Investment bank Barclays Capital says that US oil product inventories now stand at just 10.7 million barrels above the five-year average, compared with 27.2 million barrels just four weeks ago.
The International Energy Agency (IEA) caught the attention of traders earlier in the week after sharply reducing its forecast of global oil demand growth in 2008.
When the forecast was first introduced in monthly reports in July 2007, it was put at 2.18 million barrels a day (b/d). This was reduced to 1.72 million b/d in March and just 1.27 million b/d in April.
Barclays Capital, however, says the downward revision is not as significant as it first seemed and was just proof that the IEA’s forecast numbers were too high in 2007 when they were out of line with the wider market.