Oil prices today climbed above 70 US dollars a barrel amid further signs that a global economic recovery will boost demand.

Benchmark crude for September delivery rose to 70.18 dollars a barrel in Singapore and is expected to test its eight-month high of 73.23 dollars in coming days.

The rally comes after strong gains on global stock markets in recent weeks amid positive economic data, including better-than-expected US growth figures.

Victor Shum, an energy analyst with Purvin & Gertz in Singapore, said: "Optimism for economic recovery is fighting the weak fundamentals and right now the optimism is holding the upper hand."

Oil prices have almost doubled from below 35 dollars a barrel in March as investor optimism grows that the US recession could be slowing. The figure peaked at 147 US dollars in July of last year.

Forecourt costs have followed suit, with motorists seeing the average price of a litre of unleaded petrol edge up to £1.02 last week.

Mohammad Ali Khatibi, Iran's governor to the Organisation of Petroleum Exporting Countries, said yesterday he expected crude prices to reach 80 dollars a barrel by January.