Oil prices hit fresh 5-week highs on Friday after gasoline stocks in the US fell ahead of the peak demand season, stoking fears of a summer price spike.
US light crude futures gained US$0.45 to US$29.55, hitting a peak at US$29.70, the highest price since April 22. International benchmark Brent crude oil added US$0.29 to US$26.32 per barrel.
The gains followed on the heels of Thursday's US$0.44 rise in Brent on US government data showing gasoline stocks dropping 3.4 million barrels last week.
"Gasoline inventories fell heavily in the period before the traditional start of the US driving season," said Paul Horsnell of investment bank J.P. Morgan.
"A fall at this point is not a healthy sign," he said.
Some analysts have been predicting a spike in gasoline prices this summer, when US demand peaks.
Petroleum inventories in North America have remained stubbornly below normal all year, in part because of market jitters attributed to the war in Iraq.
Traders' concern over low stocks has been exacerbated by signs that OPEC exporters are preparing to make further reductions in oil supply at a meeting next month.
The cartel is worried that a post-war resumption of Iraqi crude exports could derail four years of careful oil market management, which has kept the price of its export basket close to OPEC's central US$25 per barrel target.
The head of the West's energy watchdog, the International Energy Agency, warned the cartel against further cuts on Thursday, fearing higher prices could hit economic growth in the West.
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