Oil rose to $62 a barrel on Thursday as refinery problems and falling inventories raised supply concerns in top energy consumer the United States leading into spring when driving demand picks up.
US crude settled 21 cents higher at $62.00 a barrel, the highest settlement since December 22. US oil is now up 25 percent from January 18, when prices fell as low as $49.90. London Brent crude was up 22 cents at $62.11 a barrel.
Prices pushed higher after Valero Energy Corp reduced runs at its Port Arthur, Texas, plant, adding to a string of refinery glitches this week as US companies gear up for the summer driving season.
"Refinery problems such as this and a stabilising equities market has given the oil markets support," said Phil Flynn, analyst at Alaron Trading in Chicago.
Traders have been looking for signs of glitches in oil demand following a sharp decline in China's main stock market on Tuesday which triggered big falls in US and European markets.
Stock markets in the United States and Europe recovered some stability on Wednesday, but weakened slightly on Thursday because of worries about the global economic outlook.
Analysts predicted oil and other commodities could continue to be influenced by volatile stock markets in the coming days. "It is difficult to say which direction the next $5 on crude will take," Edward Meir wrote in the Man Energy Daily Report.
"It will probably be by only next week that we decouple from the equity markets altogether," he added. "The selling in equities may not be over just yet."
Crude prices bounded higher on Wednesday in response to U.S data that showed unexpectedly large draws in inventories of distillates, including heating oil, which fell 3.8 million barrels, while gasoline slid 1.9 million barrels. EIA/S]
The stock data, published by the US Energy Information Administration, helped push the price of gasoline, increasingly in focus ahead of the summer US driving season, to a six-month high.