Oil prices rose Thursday, staying above the US$65 a barrel mark, as the market digested U.S. petroleum data that showed a fall in crude stocks but a rise in gasoline inventories, suggesting that soaring prices are undercutting U.S. gasoline demand.
Front-month October light, sweet crude contracts on the New York Mercantile Exchange rose 17 cents to US$65.26 a barrel mid-afternoon in trading in Singapore. Crude prices spiked nearly US$2 overnight following the Department of Energy's weekly petroleum data snapshot, to US$65.09, around 50 percent higher than a year ago.
Wednesday's inventories report showed that while crude stocks fell 6.6 million barrels to 308.4 million barrels from lower imports and output lockdowns due to Hurricane Katrina, gasoline stocks grew a surprising 1.9 million barrels to 192 million commercially available barrels.
"To the extent that the market reacted pretty bullishly, probably there is a bit more upside," said Commonwealth Bank commodities strategist David Thurtell from Sydney, Australia.
"Its hard to get a definitive where prices are going just because of Hurricane Katrina...(But) the data did show that gasoline demand has slowed," he said.
Some analysts, meanwhile, looked ahead to the Northern Hemisphere winter, when demand for heating fuels peak. The Energy Department said distillate stocks, which group heating oil, jet fuel-kerosene and diesel, fell 1.1 million barrels to 133.3 million barrels, just ahead of the heating season, reports the AP.