Oil steadies

Oil prices steadied on Thursday over $68, after a rally on thinning US gasoline stockpiles that sparked concerns over potential supply problems during the summer driving season. London Brent crude, currently seen as more representative of global oil prices than US crude, inched 3 cents higher to $68.60 a barrel, after gaining $1.41 on Wednesday.
US crude edged 1 cent up to $65.85. Analysts said gasoline was dragging crude prices up by the collar, and wondered if US refiners could recover from a slew of disruptions and scheduled maintenance to help bolster stock levels before peak demand kicks in.
"You're no longer in the window of catching up," said Tobin Gorey, an analyst at Commonwealth Bank of Australia. "There is also a demand side to this, which is supporting current prices."
Gasoline inventory levels in the United States fell 2.8 million barrels much more than forecasts of 400,000 barrels, bringing stocks down nearly 15 percent since February and the lowest since October 2005, US government data showed.
Gasoline demand over the past four weeks was also up 2.3 percent versus the same period last year. Refinery utilisation dropped by 2.6 percentage points, contrary to forecasts calling for an increase of 0.4 percentage points.
Analysts said that rising crude inventories in the United States could keep a lid on further spikes. "There is a lot of crude around and they are going to have to move it or it's going to burn a hole in somebody's pocket just sitting around," Gorey said.
Crude stocks rose by 2.1 million barrels in the week ended April 20, despite forecasts of a draw, though swollen stocks at the Oklahoma delivery point for US crude futures fell 1.2 million barrels, the government data showed.
Prices were also supported by worries over instability in Opec producer Nigeria, where violence has flared after weekend elections that observers say were rigged.
Nigeria has lost 600,000 barrels per day of output for over a year, though Nigerian officials say more than half that volume will be restarted by the end of May.
The dispute between Iran and the West is also a supportive factor, though the EU and the Opec producer said they had made progress on Wednesday at talks designed to end the stand-off over Tehran's nuclear enrichment programme.