Oil prices rise

Oil prices continue rising, nearing US$77 a barrel amid worries that inventories of crude oil at a key Oklahoma terminal fell last week.

Light, sweet crude for September delivery rose 98 cents to US$76.86 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract had risen US$2.32 to US$75.88 on Wednesday, reversing a three-day decline as traders started buying at lower prices.

September Brent crude advanced 59 cents to US$76.91 a barrel on the ICE Futures exchange in London.

Prices jumped Wednesday after the U.S. Energy Department's weekly supply report showed overall increases in gasoline inventories and refinery utilization, and declines in inventories of crude oil, roughly in line with analyst expectations.

But traders chose to focus on a 1.4 million barrel decline in oil inventories in and around the Cushing, Oklahoma, delivery point for crude traded on the Nymex, analysts said.

The weekly report said gasoline inventories grew by 800,000 barrels in the week ended July 20, larger than the 510,000-barrel increase analysts surveyed by Dow Jones Newswires, on average, had predicted.

Refinery utilization grew by 0.7 percent to 91.7 percent, nearly in line with analyst predictions of an 0.8 percent increase.

The report said crude oil inventories fell by 1.1 million barrels, exactly what analysts had expected. Distillates, which include heating oil and diesel, rose by 1.5 million barrels, more than double analyst forecasts for a 730,000-barrel increase.

Imports of gasoline rose by 737,000 barrels a day to an average of 1.65 million barrels per day last week, the highest weekly average ever. Crude oil imports averaged 10.4 million barrels a day, up 3,000 barrels a day from the previous week.

Nymex heating oil rose 1.52 cent to US$2.0811 a gallon (3.8 liters) while gasoline futures gained 2.16 cents to US$2.1095 a gallon. Natural gas prices added 4.5 cents to US$5.970 per 1,000 cubic feet.

Vienna's PVM Oil Associates noted that oil prices may also have gained support from comments by Iranian President Mahmoud Ahmadinejad, who said Wednesday that the West must accept Iran's right to pursue a nuclear program as the sole way to settle the ongoing controversy.

"The acceptance of the rights of the Iranian nation, by the West, is the only solution for the nuclear issue," Ahmadinejad said during a live talk show on state television.

The U.S. and some of its allies have accused Iran of secretly developing nuclear weapons and have demanded the country suspend its uranium enrichment activities. Iran has maintained its nuclear program is peaceful and has said it will not stop enrichment despite two sets of U.N. sanctions and the threat of more.