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Last Updated: Thursday, 5 July 2007, 20:27 GMT 21:27 UK
Nigeria tension helps oil surge
US refinery
During summer months, oil prices tend to follow US petrol demand
Global oil prices have hit 10-month highs of more than $74 a barrel, as concerns over supply from the Niger Delta intensified.

A three-year-old British girl became the latest kidnap victim in the volatile oil-rich region.

Brent crude leapt by $1.70 to $74.75 in London on Thursday - a level not seen since August 2006. US light crude was 40 cents ahead at $71.81

The rises came despite it emerging that US energy reserves had risen.

Official figures showed that supplies of petrol were also better than expected.

'Spooked'

Ongoing anti-government violence in Nigeria has put an upward pressure on global oil prices.

Most multinational oil companies operating in the area have pulled families of expatriate staff out of the region after a spate of kidnappings.

However the British girl who was taken is not the offspring of an oil worker.

"I think there is concern about the Nigerian kidnapping and geopolitics," said Stephen Schork, president of The Schork Report.

"The market might be thinking this could bring things in Lagos to a head. I think the Brent market is really spooked by that."

The Department of Energy said that petrol inventories jumped by 1.8 million barrels last week - more than treble the 500,000 analysts had predicted.

With an estimated 41 million Americans having hit the roads for Independence Day travel, analysts predict this week will have seen a squeeze on US petrol stocks.

And in separate data, US crude oil stockpiles jumped by 3.1 million barrels to 354 million barrels, wrong-footing analysts.

"We actually had larger than expected increases both in crude and refined products," said Jim Ritterbusch of Ritterbusch & Associates, Illinois.


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