NEW YORK - Oil rose to nearly US$72 today on US petrol supply concerns heading into peak vacation season as demand from motorists in the world's top consumer holds strong in the face of high pump prices.
US crude CLc1 settled 12 cents higher at US$71.92, building on a 93
cent gain yesterday. London Brent crude LCOc1 rose 25 cents to US$70.98.
Oil gained following news that a key shipping channel near Lake Charles, Louisiana, will remain shut two to four more days to clean up an oil spill.
Three nearby oil refineries remain cut off from crude shipments and have reduced fuel production, and ConocoPhillips on Tuesday asked the government to provide 500,000 barrels of crude from the US Strategic Petroleum Reserve to make up for lost supply.
The disruptions come days ahead of the July 4 Independence Day holiday, when petrol demand typically peaks as Americans take to the roads for vacation.
US crude has traded between US$69 and US$72 for more than a month as the market balances geopolitical tensions and rising global demand against inflation fears and brimming US fuel stocks.
"There are not a lot of reasons to sell right at this moment and this lack of downward pressure has released the spring," said Geoff Pyne at ABN AMRO.
US drivers are buying more motor fuel than last year, despite paying almost US$3 a gallon at the pump.
US oil inventory data, due to be released tomorrow, is expected to show that domestic petrol supplies rose only slightly last week, with strong demand continuing at above 9 million barrels per day (bpd), according to a Reuters survey of analysts EIA/S .
The inventory data is also expected to show an 800,000-barrel drop in domestic crude supplies, due to the closure of the Louisiana shipping channel.
Signs of strong demand are easing worries that high oil prices are feeding inflation that could hit economic growth and dampen consumers' thirst for oil.
US Federal Reserve policy-makers, gathering on Wednesday and Thursday, are widely expected to raise interest rates and signal that further increases may be needed to keep inflation in check.
Adjusted for inflation, oil is at its most expensive since 1980, the year after the Iranian revolution, and is holding near its record US$75.35 hit in April after a rally that has taken prices up from US$20 at the start of 2002.
The rally has come on fund buying amid fears over real and potential disruptions.
Opec's No. 2 producer, Iran, repeated on Monday it stood ready to use its 2.5 million bpd of exports in self-defence if threatened by a dispute over its nuclear programme.
- REUTERS
NEW YORK - Oil rose to nearly US$72 today on US petrol supply concerns heading into peak vacation season as demand from motorists in the world's top consumer holds strong in the face of high pump prices.
US crude CLc1 settled 12 cents higher at US$71.92, building on a 93
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