World oil prices climbed this evening as traders absorbed news of a smaller-than-expected increase in US petrol inventories last week.
New York's main contract, light sweet crude for delivery in August, gained 69 cents to $70.03 a barrel in pit trading. In London, Brent North Sea crude for August delivery added 63 cents to $68.71 a barrel in electronic deals.
The US Department of Energy revealed earlier today that US crude oil reserves rose by 1.4 million barrels to 347.1 million in the week to June 16, much stronger than the rise of 500,000 expected by financial markets. Crude oil inventories are at their highest level since late May 1998.
But reserves of motor fuel increased by 300,000 barrels to 213.4 million in the week. That was sharply below the rise of 1.5 million expected by analysts but marked the eighth weekly increase in a row. Petrol numbers are under scrutiny as drivers in the US begin taking to the roads en masse for their summer holidays.
The DoE also reported that US refineries operated at 93.3% capacity in the past week, up from 92.7% in the prior week. Over the past four weeks, US demand for petrol has been running 0.9% higher than a year ago, according to the report.
In recent weeks, traders have fretted over rising expectations that global central banks will get tough on inflation by increasing interest rates to curb economic growth - and also demand for crude.
Traders remain anxious over the Iranian nuclear energy crisis because Iran is the fourth-biggest producer of crude and any action against the Islamic republic could drastically affect its exports.
Nigeria, Africa's biggest crude producer, is also a key concern due to ongoing unrest which has slashed the country's production by around 20% since the start of 2006.