Oil price climbs on rising demand

The US holiday season means a spike in demand for fuel

Oil prices have hit their highest level in almost a year as US stockpiles fall while demand from refineries rises.

US light sweet crude climbed as much as 1.8% to $77.24 a barrel, while London Brent crude rose as high as $77.16. Both prices fell back later in trading.

The rise came a day after a US Department of Energy report showed crude oil stockpiles had fallen while refineries had stepped up production.

Refinery output has risen to counter recent shutdowns and meet high demand.

During the summer months, Americans tend to use more fuel as they take to their cars for the holidays.

According to the weekly energy department report, crude oil stockpiles fell by 1.1 million barrels while utilisation of refineries grew by 0.7% to 91.7% as output moved up a gear.

The rise in oil prices also marked the first time US light sweet crude has been higher than Brent crude since February. Traditionally US oil has traded at a premium to London Brent crude.