Oil rose toward $70 on Wednesday after U.S. gasoline supplies rose less than expected and on crude supply worries.
U.S. light crude for August was up 31 cents at $69.65 a barrel by 1536 GMT. London Brent crude was up 28 cents at $68.36.
Government data showed U.S. gasoline stocks rose 300,000 barrels last week, much less than the 1.2 million barrels analysts polled by Reuters had expected.
"The EIA's gasoline data showing a smaller than expected build looks supportive," said Tom Bentz, analyst at BNP Paribas commodity futures in New York.
"The crude numbers were higher than expected, but the market thinks gasoline is more important at this point."
The U.S. is in the midst of the summer driving season, when gasoline demand peaks.
U.S. gasoline futures rallied 4.94 cents to $2.0550 a gallon.
The inventory data showed U.S. crude oil stocks rose 1.4 million barrels, confounding expectations for a fall of 200,000 barrels.
Oil has held its ground even as other commodities have plunged under the combined pressure of potential U.S. rate rises and moves to curb rapid growth in China.
The measures could dampen demand for raw materials, including oil, from the world's top two energy consumers.
But with the Atlantic hurricane season barely underway, a quarter of Nigerian oil output closed by rebel attacks and continuing tension between the West and OPEC's second biggest producer Iran, few traders are brave enough to sell oil down.
ranian President Mahmoud Ahmadinejad said on Wednesday Tehran would respond by August 22 to international proposals seeking it end uranium enrichment. U.S. President George W Bush responded this seemed a long time for a reasonable answer.
"Traders seem hesitant to push crude prices higher but there are few signs that a substantial downturn is imminent," said Geoff Pyne at ABN AMRO.
"The apparent invincibility of the global economy to high prices is being called into question. Against this though, there are still legitimate fears."
The effect of high energy prices has done little to dampen rapid global expansion. Strong economic growth has hidden the impact of rising energy costs, analysts say.
"It is often remarked that the World economy has done well in the face of the steep oil price increases of the last three years," said Don Eggington of Daiwa Institute of Research in a report.
"This is true but this does not mean that there have been no effects. Indeed had there been no oil price increases since 2002 the major economies of the world would have been noticeably better off with higher GDP and lower prices."
Rising energy costs have hurt current accounts and public sector deficits in the major economies, Eggington said.
Japanese drivers have cut back on gasoline consumption due to high prices, and this was expected to continue through July. Imports of gasoline in July to the world's third largest energy consumer were expected to come in well down on the same-month last year.
China was expected to import 50,000 barrels per day less crude than contracted from the world's largest exporter Saudi Arabia in July and August.
U.S. light crude
Government data showed U.S. gasoline stocks rose 300,000 barrels last week, much less than the 1.2 million barrels analysts polled by Reuters had expected.
"The EIA's gasoline data showing a smaller than expected build looks supportive," said Tom Bentz, analyst at BNP Paribas commodity futures in New York.
"The crude numbers were higher than expected, but the market thinks gasoline is more important at this point."
The U.S. is in the midst of the summer driving season, when gasoline demand peaks.
U.S. gasoline futures
The inventory data showed U.S. crude oil stocks rose 1.4 million barrels, confounding expectations for a fall of 200,000 barrels.
Oil has held its ground even as other commodities have plunged under the combined pressure of potential U.S. rate rises and moves to curb rapid growth in China.
The measures could dampen demand for raw materials, including oil, from the world's top two energy consumers.
But with the Atlantic hurricane season barely underway, a quarter of Nigerian oil output closed by rebel attacks and continuing tension between the West and OPEC's second biggest producer Iran, few traders are brave enough to sell oil down.
ranian President Mahmoud Ahmadinejad said on Wednesday Tehran would respond by August 22 to international proposals seeking it end uranium enrichment. U.S. President George W Bush responded this seemed a long time for a reasonable answer.
"Traders seem hesitant to push crude prices higher but there are few signs that a substantial downturn is imminent," said Geoff Pyne at ABN AMRO.
"The apparent invincibility of the global economy to high prices is being called into question. Against this though, there are still legitimate fears."
The effect of high energy prices has done little to dampen rapid global expansion. Strong economic growth has hidden the impact of rising energy costs, analysts say.
"It is often remarked that the World economy has done well in the face of the steep oil price increases of the last three years," said Don Eggington of Daiwa Institute of Research in a report.
"This is true but this does not mean that there have been no effects. Indeed had there been no oil price increases since 2002 the major economies of the world would have been noticeably better off with higher GDP and lower prices."
Rising energy costs have hurt current accounts and public sector deficits in the major economies, Eggington said.
Japanese drivers have cut back on gasoline consumption due to high prices, and this was expected to continue through July. Imports of gasoline in July to the world's third largest energy consumer were expected to come in well down on the same-month last year.
China was expected to import 50,000 barrels per day less crude than contracted from the world's largest exporter Saudi Arabia in July and August.
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