Oil prices up on US demand hopes

SINGAPORE: Oil prices extended gains in Asia Thursday after a bullish US stockpiles report raised hopes of resurgent demand in the world´s top crude consumer, analysts said. US benchmark West Texas Intermediate for August delivery rose 24 cents to $101.44 while Brent crude for September gained two cents to $107.19 in afternoon trade. WTI surged $1.25 in New York Wednesday after the US Energy Information Administration (EIA) said reserves fell 7.5 million barrels in the week to July 11.

The drop outstripped analysts´ expectations of a 2.6 million barrel decline. "The strong, better-than-expected US stockpiles data is giving significant help to oil prices at the moment," David Lennox, resource analyst at Fat Prophets in Sydney, told.

The EIA´s inventory report also showed a rise in refinery utilisation in the United States, indicating plants are using more crude to increase gasoline production to keep up with the summer driving season.

Investors are also keeping a close watch on crisis-stricken crude producers in the Middle East, analysts said. Libyan exports are expected to return to global markets after the government earlier this month announced that it had regained control of two ports previously blockaded by rebels demanding autonomy in the country´s east.