Oil prices reinforced the gains they made last week as crude continued to trade at the highest levels since March on sustained fears that supplies will not be adequate to meet the demands of the US driving season.
In London, the price of benchmark Brent crude for July delivery was trading at 29.34 dollars a barrel compared with 29.03 dollars last week.
In New York, light sweet crude for July delivery was being exchanged at 30.51 dollars compared with 30.33 dollars last week.
The price of Brent was at its highest since March 9 before the Organization of Petroleum Exporting Countries (OPEC) at the end of March agreed to increase output to stabilize prices that climbed to nine-year highs earlier this year.
Dealers attributed the latest increase mainly to the latest US data on supplies, although they added that speculative buying was also thought to have lifted the price.
On Tuesday, the American Petroleum Institute revealed that crude oil stocks had fallen by 1.326 million barrels to 303.5 million in the week to May 19 from the previous week.
Compared with the figure a year earlier, crude stocks were showing a decline of 28.87 million barrels.
Gasoline stocks rose 1.380 million barrels to 202.7 million compared with the week earlier and were 17.23 million barrels lower compared with the year earlier.
An analyst at Merrill Lynch, Chris Buckley, said prices were artificially high, but that there was "some speculative interest" and he thought OPEC would probably not agree another output increase at its next meeting set for June 21.
However, if the current levels were maintained, an automatic output increase should be triggered under the informal mechanism agreed at the March OPEC meeting.
That meeting reportedly agreed that if average prices rise above or below a range of 22 to 28 dollars a barrel over 20 consecutive working days, output would automatically be adjusted – (AFP)
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