Oil Prices Headed to $80?

New York, NY, June 5, 2009--Oil was steady around $69 a barrel Friday after approaching $70 the day before, when the first drop in U.S. weekly unemployment claims in five months provided another sign that demand for crude could improve.

Benchmark crude for July delivery slipped 4 cents to $68.77 a barrel by midday in European electronic trading on the New York Mercantile Exchange. On Thursday the contract shot up $2.69 to settle at $68.81 after trading as high as $69.60.

Crude's stellar rise -- it now fetches roughly twice what it did only four months ago in dollar terms -- is leading analysts to revise forecasts even further upward, with many now saying they expect a barrel to cost $80 or more by year's end.

Oil prices have risen in tandem with global stock markets, and they soared this week to their highest levels since November, though the rally was briefly interrupted Wednesday by a jump in U.S. crude inventories.

Crude prices have been boosted by expectations that the dismal U.S. economy could be stabilizing and as some investors scoop up oil and other commodities as a hedge against a weak dollar.

"There is room for the market to go higher," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore. "We could certainly see oil between $75 to $80 by the end of the year."