Oil prices surge past $70 in US

Oil prices have crept up ahead of the US summer holidays

Oil prices have topped $70 in the US, hitting the highest level in 10 months on fears that more crude will need to be refined to boost petrol stocks.

New York light crude rose as high as $70.09 a barrel, before slipping back to trade 82 cents higher at $69.79.

Petrol stocks have declined just as the US summer driving season - a period of peak of demand - is about to begin.

A number of refineries are also about to start working again after a break, increasing demand for crude oil.

On Wednesday a report by the US Energy Department's Energy Information Administration said gasoline inventories dropped 700,000 barrels in the week ending June 22. Analysts had expected an increase of 1.1 million barrels.

The same report also showed that there was a worsening situation in distillates such as heating oil.

"Oil prices have moved higher on a supportive set of US oil inventory data," Barclays Capital said.

However, analysts said that price gains may be limited because crude stockpiles were increasing, and once petrol stores were replenished markets could see a dip in demand.

In London, a barrel of Brent crude climbed 10 cents to $70.63.