London / Singapore: Crude oil rose on speculation that US inventories dropped for a fourth week, raising concern that supply may fall short during the summer driving season.
Crude stockpiles probably declined last week by 1.5 million barrels, according to a Bloomberg survey. Inventories have lost 19 million barrels since the week ended 9 May.
Also, US President George W. Bush said on Wednesday that “all options remain on the table” to stop Iran developing nuclear weapons and threatened stronger sanctions against the oil producer.
“The crude data is definitely below the five-year average and if it drops again this will be a rather bullish thing,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna.
Crude oil for July delivery climbed as much as $3.29 (Rs141), or 2.5%, to $134.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
Prices also rose after China, the world’s second largest crude consumer, said it imported 25% more oil in May to assist repairs in southwestern regions struck by an earthquake. Imports expanded to 16.2 million tonnes, or about 3.8 million barrels a day, the Beijing-based Customs General Administration of China said on its website.
“In terms of bullish fundamentals, it’s really about China and India, which account for 70% of global demand growth,” Loacker said.
Global oil production fell for the first time in five years in 2007 and reserves also declined as prices rose to records, BP Plc. said in its annual statistical review of world energy. Output dropped 0.2% to 81.533 million barrels a day last year, it said.
Oil prices slumped 5.2% in the past two sessions, the biggest two-day decline in 11 weeks. On Tuesday, oil fell $3.04, or 2.3%, to settle at $131.31 a barrel. Prices reached a record $139.12 on 6 June on a weaker dollar and threats to supply. US demand for petrol fell 3.8% last week, a sign record prices are prompting drivers to spend less time on the road, MasterCard Inc. said on Tuesday.