Oil passes $80 as US earnings cheer market

Oil prices surged above $80 a barrel today for the first time this year after strong corporate earnings in the US boosted confidence among investors.

Crude jumped 44 cents to $80.05 in New York before falling back to stand down 29 cents to $79.32. In London, Brent crude was down 20 cents to $77.57.

The oil price was initially pushed higher by better-than-expected profits at Apple and Texas instruments, which stoked hopes that the economy is recovering.

However, they then dropped after comments by Opec secretary general Abdullah al-Badri.

"There is no shortage of oil supply," he said. "We are seeing an $80 price, which is a little bit high at this time of econoimic crisis, but we will have to wait and see if it will continue or not."

BP chief executive Tony Hayward said dollar weakness has driven oil higher in recent years but said the current price was down to fundamentals.

Crude demand has remained sluggish this year as the global economy recovers from recession.

Oil spent months trading between $65 and $75 a barrel but is up 10% in October.