Pump prices test records as US hopes lift oil to 18-month high

OIL prices rose to their highest level for 18 months yesterday on the back of growing hopes of recovery in the US economy after better-than-expected figures on jobs and the service sector.

Crude oil hit a high of $85.89 a barrel at one point, the dearest since the peak of the financial crisis in October 2008, although still well below the all-time record of $147 a barrel seen in June that year.

The latest price rise came after closely watched US employment figures on Friday showed that employers added 162,000 jobs in March, the largest job gain in three years.

Further evidence of a rebound followed yesterday when the US Institute for Supply Management released figures showing the service sector was rising at its fastest pace for four years.

The oil price news will add to pain being felt by UK motorists and businesses who have already been hit by duty rises. Although Chancellor Alistair Darling staggered the introduction of the latest duty rise in last month's Budget, 1p a litre was added on 1 April, with a further 1p rise to come in October.

The latest figures from the AA for last Wednesday – before the latest duty hike came in – showed average petrol pump prices at 118.07p per litre, with diesel at 118.67p a litre. This leaves average UK pump prices closing in on the all-time record high of 119.7p reached in July 2008.

Commentators believe the price of oil is set to rise further in the coming months.