Oil prices rose back over $56 a barrel today as concerns persisted over tightening US gasoline supply ahead of peak summer driving demand.
US light crude rose 61 cents to $56.46 a barrel, just over $1.50 below Monday's record at $58.28.
The US Energy Information Administration (EIA) said yesterday that gasoline stocks fell 2.1 million barrels to 212.3 million on strong demand from motorists and despite higher refinery activity.
But crude oil inventories in the world's top energy consuming country rose 2.4 million barrels to 317.1 million barrels, the highest level since June 2002, the EIA said.
"Inventory signals remain mixed, with builds in crude and draws in gasoline," Eurasia group analyst Antoine Halff said in a report. "While the crude surplus seems to belie concerns about a supply shortfall, the build in crude seems set to slow on higher refinery output and reduced imports."
US crude prices have surged about 30 per cent this year, driven by concerns that rapidly rising energy demand in Asia's emerging economies could outpace supply growth. An expected surge in demand in the fourth quarter and concern over a possible supply crunch has led to prices being more expensive for crude later this year.
September prices are the highest and are over two dollars above May. That is encouraging refiners to buy crude now and store it for later use.
Opec raised output limits by 500,000 barrels per day (bpd) to 27.5 million bpd last month in a bid to cool prices and left room for a second increase before a June meeting, if prices failed to drop below $55.
Opec oil production, excluding Iraq, rose 175,000 bpd in March to 27.795 million bpd, 1 per cent above the official ceiling, a Reuters survey showed.