Oil price goes above $78 a barrel

Oil prices have climbed to more than $78 a barrel, reaching the highest levels for nearly a month.

In morning trading in London, US crude for February delivery rose 30 cents from Christmas Eve's closing figure to $78.35 a barrel.

London Brent crude went up 40 cents to $76.71 a barrel.

Prices were lifted by hopes that figures due to be released later this week would show stocks were being reduced in the US.

That would indicate that demand was rising and signal an improvement in the US economy.

Some traders hope that a good figure will leave the price of US crude oil above $80 a barrel for the year-end.

Crude reckoning

On Thursday last week, benchmark crude rose $1.38 to settle at $78.05. Oil markets were closed on Friday for Christmas.

Inventory figures from the Energy Information Administration later this week will decide if oil prices can end the year above $80 a barrel, according to Clarence Chu, a trader with Hudson Capital Energy in Singapore.

The government last week reported a crude stocks drawdown of five million barrels and if inventories continue to decline - suggesting improved demand - it will be a boost to crude prices.

Better employment figures in the US last week also helped to lift hopes of economic recovery and raised expectations of stronger consumer spending.