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NEW YORK - Oil prices rose on Thursday as refinery problems and falling inventories raised supply concerns in top energy consumer the United States leading into spring when driving demand picks up.
US crude was up 11 cents at US$61.90 a barrel by 1.26pm (7.26am NZT), after ending 33 cents higher on Wednesday. London Brent crude was up 20 cents at US$62.09.
Prices pushed higher after news Valero Energy Corp. had reduced runs at its Port Arthur, Texas plant, adding to a string of refinery glitches this week as US companies gear up for the summer driving season.
"Refinery problems such as this and a stabilizing equities market has given the oil markets support," said Phil Flynn, analyst at Alaron Trading in Chicago.
Traders have been looking for signs of glitches in oil demand following a sharp decline in China's main stock market on Tuesday which triggered big falls in US and European markets.
Stock markets in the United States and Europe recovered some stability on Wednesday, but weakened slightly on Thursday because of worries about the global economic outlook.
Analysts predicted oil and other commodities could continue to be influenced by volatile stock markets in the coming days.
"It is difficult to say which direction the next US$5 on crude will take," Edward Meir wrote in the Man Energy Daily Report.
"It will probably be by only next week that we decouple from the equity markets altogether," he added. "The selling in equities may not be over just yet."
Crude prices bounded higher on Wednesday in response to US data that showed unexpectedly large draws in inventories of distillates, including heating oil, which fell 3.8 million barrels, while petrol slid 1.9 million barrels. EIA/S
The stock data, published by the US Energy Information Administration, helped to push the price of petrol, increasingly in focus ahead of the summer US driving season, to a six-month high.
- REUTERS
