Page last updated at 21:14 GMT, Wednesday, 13 August 2008 22:14 UK

Oil prices rise as stocks decline

oil pump
Oil prices hit record highs in July

Oil prices have climbed after weekly US government figures showed a drop in crude oil and petrol inventories.

US light sweet crude settled $2.99 higher at $116 a barrel, while London Brent rose $2.32 at $113.47.

Energy Information Administration data showed that crude oil imports had been hit by tropical storm Edouard.

Despite the rise, the price of crude oil is far off the record of $147 hit in July. Analysts say any increases are likely to be limited as demand falls.

As the US economy slows, demand for oil has fallen and there are predictions that this trend will continue.

Petrol stocks fell 6.4 million barrels to 202.8 million barrels in the week ending August 8 - marking a fall three time greater than expected, the EIA data showed.

'Weak economy'

Prices sank on Tuesday after US figures showed a sharp slowdown in domestic demand, triggered by higher fuel costs.

Data from the US Energy Department's Energy Information Administration showed demand for oil in the first half of 2008 saw its sharpest drop in 26 years, compared to a year before.

US demand for oil fell 800,000 barrels per day for the first six months of this year, compared to the same period a year earlier.

The EIA predicts that US oil demand next year will be at its lowest since 2003, at 20.08m barrels per day on "prospects of a weak economy and continuing high crude oil prices".

While US demand dropped sharply, non-industrialised nations saw demand rise by 1.3m barrels per day for the first half of 2008.

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