Oil prices showed mixed fortunes Tuesday, amid the start of the peak-demand season for motor fuel in the United States and reassurances from top crude producer Saudi Arabia that supplies were strong.
Brent North Sea crude for July delivery rose 22 cents from Monday's close to 69.93 dollars per barrel in electronic trading.
New York's main oil futures contract, light sweet crude for delivery in July, fell 62 cents from Friday's close to 64.58 dollars a barrel, in electronic deals before the official open of the US market.
US markets were shut on Monday owing to an American public holiday.
The peak-demand season for US motor fuel began on Saturday when Americans took to the roads en-masse at the start of their summer vacations.
Oil prices in London had leapt to almost 72 dollars a barrel last week, energised in part by weak motor fuel stocks in the United States ahead of the driving season.
Saudi Arabia's assistant oil minister, Prince Abdul Aziz bin Salman bin Abdul Aziz, said on Monday that the surge in oil prices was being driven by political factors, adding there was no need for additional crude supplies.
He noted, however, that while there was no need for additional crude supplies, there was a problem with refining capacity.
The price of London Brent North Sea crude hit a nine-month peak of 71.80 dollars per barrel last Thursday. Last Monday, the New York oil contract surged to 67.10 dollars per barrel.
Concerns linger over the gasoline (petrol) situation in the United States, where demand typically rises strongly during the summer driving season.
“US gasoline inventories are not likely to quickly return to historic norms,” the Commonwealth Bank of Australia said in a note to clients.
“US gasoline production is rising, which may partly alleviate the perceived tightness of the US gasoline market in time but US gasoline demand has also increased,” it said.
The US Department of Energy reported last week that stockpiles of gasoline rose 1.5 million barrels in the week ending May 18 but were still “well below the lower end of the average range” for the time of year.
Sucden analyst Michael Davies said on Tuesday: “Gasoline prices at the pumps are at a record high, but demand is not thought to have been dampened.”
