US oil prices shot higher in a second day of frenetic trading this evening, with dealers racing to claw back a record discount against Europe's Brent as they gave in to mounting evidence of tightening supplies.
Brent crude futures dropped $1.02 to $110.43 a barrel, falling after a report that EU finance ministers have cancelled a meeting planned for Wednesday, although a summit of leaders will still take place.
US crude jumped by more than $4 briefly to hit an intra-day high of $94.65, the highest price since early August. It later traded at $93.47, up $2.20.
The narrower gap between Brent and US crude appeared to lack any single trigger, instead stemming from traders' capitulation to weeks of growing signs that US Midwest oil supplies were growing tighter.
Analysts said the US crude price was responding to a big fall in US crude oil stockpiles in the past few weeks.
