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Oil rises towards $69, US gasoline worries linger

Despite record US pump prices above $3 a gallon, there is no let up in robust demand. More motorists than a year ago are expected to hit the roads during the May 26-28 US Memorial Day weekend, the traditional start to the driving season.

London Brent crude, currently seen as more representative of the global oil market, gained 75 cents to trade at $68.72 a barrel by 1321 GMT.

US crude rose 21 cents to $62.76 a barrel.

“For a majority of drivers, the thought of driving less is simply out of the question,” said Edward Meir of Man Financial Energy Group.

“...We don’t think we have seen the last of the current gasoline spiral, and could very well see one more significant spike higher during the new few weeks.”

Refinery shutdowns in the United States have kept worries bubbling over a summer supply crunch, with investors drawing little comfort from a surge of gasoline imports.

Gasoline stocks rose 1.7 million barrels last week after imports increased to 1.5 million barrels per day (bpd) -- the fifth highest level on record.

“There’s still a relatively low rate of refinery runs -- the current tightness in gasoline is unlikely to ease in the short term,” said Makoto Takeda, analyst at Bansei Securities.

The US inventory figures on Wednesday had initially added to pressure on prices after the end to an occupation of an oil hub by Nigerian villagers that had forced operator Royal Dutch Shell to cut output by 170,000 bpd.

Militant attacks have shut nearly 900,000 bpd, or 30 percent of supply capacity, from Africa’s biggest oil producer -- depriving refiners of crude prized for its gasoline content.

The Nigerian disruptions, together with worries over Iran’s dispute with the West and supply cuts by OPEC producers, have pushed crude well above a January low near $50.

Consumer nations have called on OPEC to open the taps, but the group that supplies a third of the world’s oil says it sees no need to act. Its next scheduled meeting is in September.

“OPEC is incredibly relaxed at the current state of the market,” said Barclays Capital. “Without that increase, we expect the market to overheat in the second half of the year.”

Abdullah al-Badri, the group’s Secretary-General, said OPEC is content with prices in their current range.

“I don’t want to see a low price and I don’t want to see a high price,” he said on Thursday.