Oil prices topped new 28-month highs this morning as US fuel stocks fell to the lowest level since the 1970s Arab oil embargo and Washington kept up efforts to build support for a war against Iraq.
US light crude reached a peak at $36.10 a barrel, the highest since October 2000 and marking a gain of 33 cents from yesterday's settlement in New York.
Figures from the government department Energy Information Administration (EIA) showed US crude inventories falling 4.5 million barrels to 269.8 million barrels in the week to February 7th, the lowest level since October 1975.
Stocks are now below what US authorities recommend as the minimum of 270 million barrels - roughly 14 days of domestic consumption - to keep up with the nation's energy needs. The EIA said inventories of heating oil, gasoline and jet fuel were also running at a deficit to year-ago levels.
Crude prices are less than $2 under a September 2000 peak at $37.80 when the Clinton administration ordered the release of reserves from strategic stocks.
The Bush administration has so far avoided using emergency oil. "We are continuing to monitor the situation," US Energy Secretary Spencer Abraham said.
Along with healthy demand for winter heating fuels as parts of the US have been blasted with Arctic temperatures, US fuel stocks have been severely dented by a two-month anti-government strike in Venezuela.
Venezuela, the fifth-biggest oil exporter, normally supplies 13 per cent of US oil imports. Output in Latin America's biggest producer is making a slow recovery but is running at less than half of pre-strike levels at three million barrels per day.