14 Aug 2008

Oil jumps nearly $US4/b

8:37 am on 14 August 2008

Oil has risen in price by nearly $US4 a barrel after a decline in fuel and crude inventories in the United States.

US crude traded up $US3.87 to $US116.88 a barrel by 1:35pm EDT (1735 GMT) on Wednesday. London Brent rose $US3.40 to $US114.55.

US gasoline stocks dropped by 6.4 million barrels in the week to 8 August. The Energy Information Administration said crude stocks fell by 400,000 barrels and distillates inventories unexpectedly decreased.

The US Transportation Department said on Wednesday that American motorists drove 4.7% fewer miles in June than they did a year ago due to high gasoline prices.

US oil demand fell by an average 800,000 barrels per day year on year during the first half of 2008 - the sharpest fall in 26 years.

Meanwhile, BP has closed an oil pipeline and a natural gas pipeline running from the Caspian Sea through Georgia due to hostilities between Russia and Georgia. A ceasefire is now in force there. Neither line has been damaged.

A third BP pipeline that runs through Georgia, the Baku-Tblisi-Ceyhan oil pipeline, was shut last week following an explosion in Turkey.