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Oil up on rosy US economic data

US light crude oil CLc1 for September rose 53 cents to $46.58 a barrel and London Brent LCOc1 rose 15 cents to $42.84 a barrel. US prices had set new all-time highs in all but one of the previous 12 trading sessions, peaking on Monday at $46.91.

Prices rose after US government showed consumer prices dropped in July for the first time in eight months in a report showing underlying inflation pressures largely in check."The latest consumer price data implies demand will continue to be strong because it appears that higher energy prices has had little impact on overall inflation," said Phil Flynn, analyst at Alaron Trading in Chicago. "It looks like the concerns that high oil prices will drive inflation higher were overblown," Flynn added.

Attention is also shifting to the US Energy Information Administration inventory data for the week ended August 13, due to be published today. A Reuters survey of eight analysts forecasts a one-million barrel fall in commercial US crude stocks. In the week to August 6 crude stocks fell 1.9 million barrels to 298.6 million. US oil demand so far this year is running at a strong growth rate of 3.5 per cent, despite high prices. The price reversed early falls as fears of supply disruptions receded following a convincing referendum victory in Venezuela for President H Chavez and after Yukos said it had received a government assurance on Sept. exports. Continued disruption in Iraqi supplies and strong world fuel demand underpinned prices that remain $9 a barrel, 25 per cent, higher than at the end of June.