US oil prices continued to climb on Thursday, approaching $36 a barrel on persistent concerns that gasoline stocks in the United States might not be enough to meet peak demand in the summer holiday season.
US light crude rose 14 cents to $35.82 a barrel, while London's Brent crude gained 13 cents to $31.70.
Oil prices rallied by up to $1 on Wednesday following the release of US government data showing total commercial petroleum supplies in the United States running at a deficit of more than 60 million barrels to the five-year average.
The Energy Information Administration, which publishes US oil stocks data every on Wednesday, posted declines in national gasoline and distillate inventories, while crude tanks were unchanged at a near-historic low.
Traders are closely watching gasoline stocks, which traditionally should be building at this time of year in preparation for the summer holidays when demand peaks.
The EIA data showed gasoline tanks falling 1.6 million barrels to 203.4 million in the week to February 20, 2.5 million barrels below levels at the same time last year.
Crude stocks were balanced as a drop in imports came as refinery-processing rates fell three percentage points to 87.3 percent of capacity, largely due to maintenance stoppages.
The EIA pegged crude stocks at 273.8 million barrels, just 10 million above the lowest level since 1976 that was hit in January.
"We'll have to see a number of weeks of pretty solid stock builds and higher refinery utilisation before the market will settle down," said David Thurtell, commodities strategist at Commonwealth Bank of Australia.
Along with US supplies, traders are also watching the Opec producers' group for signs that it will make good a pledge to cut 1.5 million barrels per day (bpd) of excess output that members were pumping above the official production ceiling.
The Organisation of the Petroleum Exporting Countries also agreed this month to chop output limits by one million bpd to 23.5 million bpd from April 1.
"We'll have to see what Opec's compliance was in February, but the real story will come in March. If it looks like they are not sticking to quotas, prices will come down.
On the other hand, if prices don't come down, compliance will slip to bring them down," Thurtell said. Opec ministers are due to meet on March 31 to review production policy.