Oil prices pushed above $61 a barrel on Wednesday to touch a new six-month high on bullish inventory data and a spate of refinery accidents in the United States, in spite of weak market fundamentals.
Fire struck gasoline making units at two U.S. refineries this week, triggering a roughly 8 percent spike in U.S. gasoline futures that will likely filter through to retail pumps just as the summer driving season begins.
U.S. crude rose $1.24 to $61.34 a barrel by 9:24 a.m. EDT after briefly touching $61.45, and London Brent rose $1.04 to $59.96.
It's all on the back of those refinery glitches and some Nigerian scuffle, said Rob Montefusco, an oil trader at Sucden Financial in London.
All the economic data out this morning has been terrible, but if you strip it back, it's RBOB-led.
Reformulated gasoline blendstock for oxygen blending, or RBOB, was trading at $1.8480 a gallon, up 2.39 percent on the day and its highest level since October 16, 2008.
Unrest in OPEC member Nigeria, Africa's top oil and gas exporter, also drove up prices this week. Security forces clashed with militants on Tuesday near an oil flow station operated by Chevron
Italy's biggest oil and gas company ENI SpA
Oil prices have been on an upward trend since mid-April on equity-led rallies. They have recovered from below $33 in December after a plunge from record highs above $147 in July.
On Tuesday after oil markets closed industry group the American Petroleum Institute (API) released data showing U.S. crude stocks fell by a much larger than expected 4.5 million barrels in the week to May 15.
A Reuters poll showed government data due on Wednesday was expected to show U.S. crude stockpiles fell last week by 200,000 barrels, with gasoline inventories down by 1.2 million barrels and distillate stocks up 1.0 million barrels.
U.S. gasoline is more than likely still contracting, even though we are approaching the Memorial Day weekend, said Harry Tchilinguirian, senior oil analyst at BNP Paribas.
The weekly data, from a growth perspective, is not showing any signs of improvement.
Commodities markets have closely tracked the stock market in recent months as dealers seek signs of economic health.
Tokyo's Nikkei average <.N225> was up 0.59 percent at 3:47 a.m. EDT, shrugging off data that showed Japan suffered a record contraction in the first quarter.
Oil data out of Tokyo, center of the world's No. 2 economy, also showed gasoline inventories at their lowest level since September 2007 and kerosene stocks declining to a near three-year low in part due to strong sales.
The Algerian oil minister said the Organization of Petroleum Exporting Countries (OPEC), which has agreed to cut 4.2 million bpd of output since September to prop up prices, has no reason to cut output more when it next meets on May 28.
If the price stays at this level ... I don't think there will be any reason to cut, said Algerian Energy and Mines Minister Chakib Khelil in Buenos Aires.
(Editing by James Jukwey)