Oil prices topped $86 a barrel today as surging Chinese growth strengthened expectations of a rebalancing in markets with excess supplies.

For May delivery, US crude rose 31¢ to $86.15 a barrel at 0533 GMT, while ICE Brent gained 30¢ to $86.45, reports Reuters.

China’s economic growth accelerated to the fastest pace in almost three years in Q1, raising the prospect that it will let the yuan appreciate, increasing its purchasing power regarding dollar-denominated commodities.

Oil prices increased by more than 2% from Wednesday, ending a five-day losing streak.

In its monthly report, OPEC said economic optimism was driving prices, cutting its forecast for 2010 oil demand growth.