Oil prices look set  to rise gradually to above US$90 a barrel this year 2010 but they are not likely to head back to the peaks seen in 2008.

That is according to industry experts who also said that ongoing uncertainty in European economies and rising market supply may help put a lid on oil prices from trending even higher going forward.

Recent international disagreements over Iran’s nuclear programme have done little to nudge oil prices from their stubborn range of between US$70 and US$84 a barrel, according to market watchers.

Oil prices have found support in the improving confidence in the global economy and better economic data from the US but the gains have also been capped by worries over some European economies and higher supply.

Purvin and Gertz managing consultant Victor Shum said: “Most people expect demand growth to continue as the economy recovers. But supply is growing at the same time, and it’s actually growing faster and so because of this supply demand balance that is holding back any further gains in oil.”

“So when oil gains in pricing, I expect a very gradual move, we’re not going to see a spike,” added Mr Shum.