Oil price up as inventories fall

The US summer driving season is nearing its end

Global oil prices have soared after the US Energy Department reported a larger-than-expected decline in petrol and oil inventories.

Activity at refineries also dropped unexpectedly, the data suggested.

US light, sweet crude climbed $1.78 to $73.51 a barrel while in London, Brent crude added $1.58 to $72.13.

The figures pushed shares in US oil firms Chevron, ConocoPhillips and Exxon Mobil all up by about 2%, while Royal Dutch Shell added 1%.

'More needed'

"With gasoline inventories standing at very low levels, refinery outages plaguing the market and demand running at an all-time high, further gains are likely," said Barclays Capital analysts.

Other analysts said that the rapid rise in oil prices suggested that the refining industry is easing back, after scrambling to produce enough petrol for the US summer driving season, when demand is at its peak.

"It drives home the ... continued tightness in gasoline inventories," said head of energy research at Fimat USA, Antoine Halff.

Oil has held up well compared to other commodities, amid the turmoil on world markets, though has fallen from an all-time high of $78.77, seen on 1 August.

However some analysts argue that the recent US data supports the view that oil supply will struggle to keep pace with demand unless more is pumped by members of the Organization of the Petroleum Exporting Countries (Opec) cartel.

However this week Opec officials reiterated their claims that there is ample crude oil available and that any shortages are largely due to bottlenecks at refineries.

China growth

Separately, China's biggest offshore oil and gas producer, CNOOC, said that sagging oil prices had result in its first half-year profits fall in more than three years.

Oil prices hit a 19-month low in January of about $50 but the rebound in prices since June left CNOOC optimistic about its second half performance.

The firm is on the hunt for potential takeover targets as it tries to secure enough oil for China - which is now the world's second largest oil consumer behind the US.