The price of oil breached $80 a barrel in early trading in Asia, a new high for the year, boosted by the weak US dollar and strong US company results.
US light crude then fell back slightly to $79.56. London Brent was unchanged at $77.77 a barrel.
Oil prices are rising as encouraging US company results fuel optimism for the global economic recovery.
Analysts said the short-term direction of oil is being driven by the dollar and rising equity markets.
"I think we will continue higher as we move into the fourth quarter. Investors think equity earnings are a good guide for the economic outlook so the better-than-expected reporting season is supporting [the oil price]," said Mark Pervan at ANZ.
But there are concerns that sentiment, rather than fundamentals, are driving the oil price, and that once these fundamentals re-establish themselves, the price may fall.
These include spare capacity, stock piles of oil and weak demand among industrialised nations.
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