11 May 2006, 10:21  Oil extends rise above $72 on US gasoline concerns

Oil climbed further above $72 on Thursday as worries over gasoline supply due to outages at two U.S. refineries as the summer driving season looms, outweighed swelling inventories that rose above expectations. U.S. light crude gained 33 cents to $72.46 a barrel by 0527 GMT, after rising by $1.44 on Wednesday. London Brent crude rose 28 cents to $72.72 a barrel. "Gasoline demand is at its highest since August last year, before the hurricanes hit the U.S. It's significant because it shows that U.S. consumers are not so deterred by the high prices," said Dariusz Kowalcyzk, the chief investment strategist at Hong Kong-based CFC Securities. "Demand for crude is also expected to rise as refineries come back into full operation and ramp up production for the summer. Although the stock data is certainly bearish, I believe the market has already priced that in." CFC Securities estimates that U.S. gasoline demand, for the week ended May 5, was at 10.2 million barrels per day (bpd), the highest level since Aug. 19 when it was at 10.3 million bpd. Weekly data from the U.S. Energy Information Administration (EIA), showed an increase of 2.4 million barrels -- double analysts' estimates of a 1.2 million-barrel rise -- to 205.1 million barrels, which had earlier triggered a price fall.

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