LONDON: Oil prices on both sides of the Atlantic rose on Wednesday, with the US benchmark climbing to a 14-month high near $105 a barrel, buoyed by a sharp decline in fuel stockpiles in top oil consumer the United States.
But worries about a sluggish Chinese economy, underlined by bleak June trade data, kept a lid on price gains.
US crude rose $1.26 to $104.79 a barrel by 0959 GMT, after hitting a 14-month high of $104.87. Brent edged up 32 cents to $108.13 a barrel.
"While oil demand in the US appears to be reviving, current figures from China point to slowing demand dynamism there," said a Commerzbank research note.
The spread between Brent and US oil narrowed 85 cents to $3.41 as the US benchmark gained on data showing a drawdown in stocks.
US crude stocks fell nearly 9 million barrels last week, compared with analysts' expectations for a drop of 3.3 million barrels, according to the American Petroleum Institute. The US Energy Information Administration is scheduled to release its inventory report later in the day.
But analysts pointed out that the drop in US stockpiles, which is boosting oil prices, is because of the summer driving season there and that global demand prospects remain weak.
"The market is too high from a fundamentals point of view," said Jonathan Barratt, chief executive of Sydney-based commodity research firm Barratt's Bulletin. "It is riding on the back of expectations of a revival in US demand."
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