Oil edged further above $70 a barrel on Thursday, as US gasoline inventories fell against expectations during the peak-summer driving season, while swelling crude stock levels limited the upside.
London Brent crude, currently seen as the best benchmark for global oil prices, was up 23 cents at $70.76 a barrel, after rising 35 cents on Wednesday.
US light, sweet crude gained 32 cents to $69.29 a barrel, following an overnight spike of $1.20. US gasoline inventories fell by 700,000 barrels last week, against an expected rise of 1.2 million barrels, government data showed, while demand over the past four weeks is up 1.4 percent from a year ago.
Distillate supplies fell by 2.3 million barrels, deepening a year-on-year deficit in heating oil stocks. Refinery operating rates rose last week, tempering price gains as traders expected fuel supplies to recover, but utilisation rates at below 90 percent remained unusually low for the summer.
"The fall in gasoline stocks is due mainly to a lack of imports, not domestic production, which has been ramping up," said Tobin Gores, commodities strategist at the Commonwealth Bank of Australia.
"With the refineries coming back online, it seems unlikely that the inventories will keep falling." The upside in prices is also limited by swelling crude inventories, which ballooned by 1.6 million barrels to a fresh nine-year high, although stocks in the sensitive Cussing, Oklahoma, delivery point fell by 1.4 million barrels.
Longer-term supplies could be affected by the exits of US majors Exxon Mobil Corp and ConocoPhillips from Venezuela after the government decided to nationalise the companies' mullet-billion dollar oil projects.
Analysts said the move might lead to falling production in the Opec member, which is the fourth-largest supplier to the United States, due to a loss of foreign capital and expertise.
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