Oil prices held resolutely above $55 a barrel today as speculators shrugged off Opec's pledge to lift output and focused on brisk demand for transport fuel in the United States.
A deeper-than-expected draw on US crude inventories as refiners boosted production rates supported prices, countering a substantial rise in supplies of distillates.
US July light sweet crude was down 5 cents at $55.52 by earlier this morning as traders caught their breath from Wednesday's rally to a two-month peak of $56.75 a barrel.
That was about $1.50 away from the record high of early April. Opec agreed yesterday to boost its production quotas by 500,000 barrels per day (bpd) to match existing output, a gesture it admitted was little more than symbolic.
Even the cartel's pledge to release another 500,000 bpd of real production within a matter of weeks if prices remained high or rallied further did little to curb the enthusiasm of speculators who are counting on a tighter market later this year.
Saudi Arabian Oil Minister Ali al-Naimi echoed the view of many analysts who say the problem is not an insufficient supply of crude oil but a shortage of refining capacity to produce consumer fuels - particularly distillates like diesel and heating oil.