Oil prices rose on Monday as refinery outages in the United States stoked supply concerns again as the end of the summer driving season neared. US crude settled up 88 cents at $71.97 a barrel, after jumping $1.26 on Friday. London Brent rose 33 cents to $70.95 a barrel, with trading volumes lighter than normal due to a holiday in Britain.
News of fresh US refinery problems and forecasts of falling inventories supported gasoline and oil futures.
"Products seem to be leading the way today, gasoline in particular," said Eric Wittenauer, analyst at A.G. Edwards. Oil markets have been on edge over US refinery performance this summer, as a string of unplanned outages helped drain stockpiles during the peak driving demand season.
Prices edged higher after traders said Citgo cut rates at its 156,000-barrel-per-day refinery in Corpus Christi, Texas, after a problem with the alkylation unit.
Markets are also awaiting news on when Chevron Corp will restart a crude unit at its giant Pascagoula, Mississippi, refinery, one of the 10 biggest in the United States, following a fire. The company expects to cancel or reroute some crude shipments due to the shutdown.
"Although refinery news appeared mixed early in the session with some restart activity reported, talk of a glitch at Citgo, Corpus Christi and lack of guidance from Chevron regarding downtime at Pascagoula, Miss., appeared to ignite the late session buying interest," said Jim Ritterbusch, president of Ritterbusch & Associates.
Further support came from forecasts US oil inventory data to be released on Wednesday would show a 1.3 million barrel draw in gasoline stocks and a 600,000 barrel draw in crude in the week to August 24, according to a Reuters poll of analysts. Oil prices have fallen since reaching a record peak of $78.77 on August 1 due to concerns about a global credit crunch and wider economic problems.
Prices eased earlier Monday as traders looked to the end of US summer driving demand. Fresh US economic data showing the housing downturn had intensified also pressured prices in early trade. Opec Secretary-General Abdullah al-Badri said on Monday he felt the international oil market was well-supplied, suggesting Opec would keep supplies at current levels when the group next meets on September 11.
SYDNEY: Oil prices fell on Monday, retreating from the last session's near 2 percent gain which was boosted by worries over gasoline supplies in top energy consumer the United States.
US crude for October delivery fell 20 cents to $70.89 a barrel. It settled $1.26 higher at $71.09 a barrel on Friday following news of troubles at various refineries. London Brent was down 22 cents at $70.40 a barrel.