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Oil strikes 8-month high

LONDON: The price of Brent crude hit the highest level for more than eight months on Friday, rising above $70 a barrel on concerns over tight supplies before recoiling on profit-taking, traders said.

Brent North Sea crude for July delivery shot up to $70.35, a price last seen on September 1, 2006.

It later stood at $69.90 in electronic trading, down 37 cents on Thursday’s close. New York’s main oil futures contract, light sweet crude for delivery in June, dipped one cent to $64.85 a barrel in electronic deals before the official open of the US market.

Earlier on Friday it reached $65.20, the highest point since May 1.

Crude futures had surged by more than two dollars on Thursday as the market focused on problems at US refineries ahead of the high-demand season for motor fuel, and unrest in oil producer Nigeria.

“The market is consolidating after an impressive surge yesterday, on the back of concerns about problems at US refineries and low gasoline stocks for this time of year,” Sucden analyst Michael Davies said in London.

US government data puts gasoline (petrol) inventories are more than 7 percent below their five-year average for mid-May.

Dealers said the market remained concerned whether US refineries could meet gasoline demand when Americans take to the highways during the holiday driving season which begins in two weeks.

The US Department of Energy said on Wednesday that gasoline reserves had risen by 1.7 million barrels to 195.2 million in the week ending May 11, above the increase of 1 million barrels forecast by analysts.

The gain followed an increase of 400,000 barrels the preceding week after steady falls for three months. afp

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