Oil scaled fresh heights for the year on Tuesday, topping $68 a barrel, with Saudi Arabia raising official selling prices in response to stronger demand.

North Sea Brent, the international benchmark, has now rebounded by 50 per cent since falling to a five-year low near $45 a barrel in January, as traders look beyond the current well-supplied market to focus on growing consumption and a slowdown in US output.

Saudi Arabia, the world’s largest crude exporter, indicated on Tuesday that it has no plans to curb its own production, which has risen above 10m barrels per day, as it moves to expand its share of the market.

The kingdom increased its own official selling prices (OSPs) to refineries in Europe and the US on Tuesday and held them steady to Asia — a move taken by traders as illustrating Saudi Arabia’s confidence in growing global demand.

Saudi Arabia’s oil minister, Ali al-Naimi, who led Opec’s decision to let prices fall last year to squeeze higher-cost producers, said on Tuesday “only Allah knows about oil prices”, demonstrating little concern that a recovery in the oil price could keep the US shale boom going.

Saudi Arabia and other Opec producers slashed OSPs in the second half of 2014 as they moved to protect their share of the market, which was threatened by fast-growing US shale output and slower rates of demand growth after three years of prices above $100 a barrel. Opec next meets in June and is widely expected to stick with the Saudi-led policy.

“While prices have risen by more than $10 in the last month, in the bigger picture, oil is still cheap compared to the past few years,” said analysts at Energy Aspects, a London-based oil consultancy.

However, some traders think the price rally may have come too fast, too soon. EOG Resources, the largest US shale producer, said this week that it would resume fracking wells in North Dakota and Texas if prices stabilise around $65 a barrel.

The US benchmark price on Nymex hit a year-high above $61 a barrel on Tuesday.

EOG said in February that it would drill but not complete around 85 wells this year as it waited for prices to recover. Anadarko Petroleum said it would do the same with 125 wells this year.

Tapping this so-called “frack-log” of uncompleted wells could add even more oil to the market in quick order, even as US inventories sit at an 80-year high.

The recent rally has also been boosted by hedge funds and other large investors who have built up a record bet on Brent’s recovery, amassing the equivalent of more than 275m barrels of oil — or roughly three days of global demand — through futures and options contracts on the Intercontinental Exchange.

Funds have also built a large net long position — the difference between bets on higher and lower prices — in the US crude oil benchmark on Nymex.

“Positioning, sentiment and fund flows remain critical for oil market direction,” said Adam Longson, an analyst at Morgan Stanley.