Upward pressure on global fuel prices looks set to continue, according to a new short-term oulook from the US Energy Information Administration (EIA) predicting global demand for oil will continue to recover strongly this year.

The EIA downgraded previous estimates by 10,000 barrels per day (bpd) as a result of weaker than expected demand from Europe, but the administration still reckons world petroleum consumption will rise by almost 1.5 million bpd to 85.5 million bpd this year, driven by global economic recovery and booming demand from Asia.

The EUA's figures lie in the mid range between similar predictions from the International Energy Agency, which last month predicted global demand will reach 86.57 million bpd this year, and the Organisation of the Petroleum Exporting Countries (OPEC), which believes demand will hit 85.24 million bpd.

The figures came as oil prices edged up this week on the back of stronger than expected US employment figures. The price of US light crude climbed to more than $86.50 (£57.07), while the price of London Brent crude on the spot market similarly rose to more than $85.70.

The EIA predicted that non-OPEC countries will increase output by 50,000 bpd to meet rising demand, but warned that any improvement in supply is likely to be offset by increased demand from China, which means the gap between global surplus oil supplies and demand will contract further this year to just 160,000 bpd.

As a result, fuel prices are expected to remain high, with the EIA predicting gasoline prices in the US this summer will be 48 cents higher than last year, with prices likely to clear the $3 a gallon mark at times.

The administration predicted that high prices would lead to lower than expected demand, noting that "the boost to gasoline consumption from the economic recovery is being countered by higher gasoline prices compared with last year".

Meanwhile, the weak euro has led to high prices at the pump across Europe, while the UK experienced near-record fuel prices over the weekend, with average petrol prices reaching 119.46p a litre – marginally short of the 119.7p record.

The trend will further fuel concerns that oil prices could rise to more than $100 a barrel again as the global economic recovery continues, providing fresh ammunition to those business leaders and geologists who fear global oil supplies are close to peaking.

However, the growing evidence that people are driving less or investing in more fuel-efficient vehicles to combat rising prices will also drive speculation that oil demand could peak as economies transition towards alternative fuel sources.

For example, the EIA figures suggest that falling production at US refineries will be partly offset by a 100,000 bpd increase in ethanol blending that will result in biofuel blends accounting for 8.9 per cent of all gasoline consumed in the US this year.

Meanwhile, geologist Colin Campbell, one of the world's leading peak oil theorists, told Reuters this week that the challenge presented by peaking oil supplies could be met by peaking global demand.

He argued that there is a "price limit" of about $100 a barrel, at which point economies would rapidly switch to alternative fuel sources. However, he warned that demand is unlikely to fall fast enough to match dwindling supplies and as a result, unrest could still occur as people are forced to rapidly reduce their oil consumption.