Oil prices have consolidated their gains from last week when they broke the $90 a barrel mark. Across the markets prices have moved away from the $80 a barrel floor established in early November.

After the European crude oil market hit more than $90 a barrel last week, US’ benchmark West Texas Intermediate (WTI) contracts inched closer, rising to $89.22 on 9 December, up $0.03 a barrel from six days earlier when it was valued at $89.190 a barrel.

The European Brent crude contract also rose by $0.15 to $91.570 a barrel from $91.42 a barrel.

The 12-crude basket of exports from the member states of the international oil producers group, Opec also rose modestly, averaging of $87.46 a barrel. This is up only $0.33 on the previous week, which settled $87.13 a barrel on 3 December.    

Rallying oil prices have brought a return of optimism in the oil markets, which are now focusing on potential gains in the coming year.

The US’ Energy Information Administration (EIA) has largely maintained its short-term energy outlook for 2010, forecasting annual crude oil demand growth to be above 2 million barrels a day (b/d).

Total demand is projected to be 87.1 million b/d, exceeding the all previous all time high of 86.4 million b/d, set in 2007. “Furthermore, recent trends suggest little sign of a significant slowdown just yet,” says analysts at Barclays Capital.

The colder than expected temperatures across Europe and north America has helped speed up demand recovery.

The latest EIA report shows that stocks of crude oil in the US, the world’s biggest consumer, at 1.08 million barrels, just 2 per cent higher than at the same time in 2009.

“Inventories are still high, despite recent declines, and oil demand is characterized, by some, as remaining weak,” says the 8 December report.

Gasoline inventories rose by 140,000 barrels at the same time to 214 million barrels, just below 2009 levels.