Oil prices approached $75 a barrel on Wednesday as U.S. crude stocks fell more sharply than expected and as the International Energy Agency forecast accelerating demand growth in 2007 and beyond.
Prices also found support in Iran's defiant stance to Western demands for limits to its nuclear ambitions.
U.S. crude futures settled up 79 cents to $74.95 a barrel, within a dollar of last week's record. London Brent rose 72 cents to $74.39 a barrel.
U.S. crude oil stocks slumped 6 million barrels last week as imports fell nearly a million barrels per day. The drop in inventories was five times larger than the 1.2 million barrels forecast among analysts polled by Reuters.
Gasoline demand from the world's largest energy consumer remained strong. Motorists have consumed 1.7 percent more gasoline in the past four weeks as they did in the same period a year ago.
"The very big draw on crude stocks is a surprise," said Phil Flynn, analyst at Alaron Trading. "Gasoline demand remains very strong ... We have a good chance of hitting new highs here."
The United States consumes over 40 percent of the world's gasoline, so even a small rise in demand can push oil prices higher. Robust U.S. gasoline demand helped push crude futures to a record last week of $75.78 a barrel.
The data covered the four-day U.S. vacation for July 4. The weekend is the biggest vacation travel weekend of the summer driving season, when annual gasoline demand peaks.
Gasoline stocks fell 400,000 barrels, compared to a forecast decline of 100,000 barrels.
MEDIUM TERM
High prices have stemmed the world's voracious appetite for oil a little, but growth in demand is expected to rise more quickly through 2011 than it did in the past decade, the Paris-based International Energy Agency said on Wednesday.
"You are still seeing high prices restrain demand," said Lawrence Eagles, head of the IEA's Oil Industry and Markets division.
"But there are a number of large developing countries such as China that have reached a threshold of income in which oil demand starts to take off."
The IEA, adviser to 26 industrialized countries, predicted the world would need 1.57 million barrels per day more oil to fuel economic growth in 2007, up from annual growth of 1.21 million bpd this year.
Prices also found support in Iran's defiant stance to Western demands for limits to its nuclear ambitions.
U.S. crude futures
U.S. crude oil stocks slumped 6 million barrels last week as imports fell nearly a million barrels per day. The drop in inventories was five times larger than the 1.2 million barrels forecast among analysts polled by Reuters.
Gasoline demand from the world's largest energy consumer remained strong. Motorists have consumed 1.7 percent more gasoline in the past four weeks as they did in the same period a year ago.
"The very big draw on crude stocks is a surprise," said Phil Flynn, analyst at Alaron Trading. "Gasoline demand remains very strong ... We have a good chance of hitting new highs here."
The United States consumes over 40 percent of the world's gasoline, so even a small rise in demand can push oil prices higher. Robust U.S. gasoline demand helped push crude futures to a record last week of $75.78 a barrel.
The data covered the four-day U.S. vacation for July 4. The weekend is the biggest vacation travel weekend of the summer driving season, when annual gasoline demand peaks.
Gasoline stocks fell 400,000 barrels, compared to a forecast decline of 100,000 barrels.
MEDIUM TERM
High prices have stemmed the world's voracious appetite for oil a little, but growth in demand is expected to rise more quickly through 2011 than it did in the past decade, the Paris-based International Energy Agency said on Wednesday.
"You are still seeing high prices restrain demand," said Lawrence Eagles, head of the IEA's Oil Industry and Markets division.
"But there are a number of large developing countries such as China that have reached a threshold of income in which oil demand starts to take off."
The IEA, adviser to 26 industrialized countries, predicted the world would need 1.57 million barrels per day more oil to fuel economic growth in 2007, up from annual growth of 1.21 million bpd this year.
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