LONDON (AFP) — Oil prices rallied Wednesday after official data showed a surprisingly sharp drop in US stockpiles of motor fuel amid the peak demand season for gasoline in the United States.
New York's main contract, light sweet crude for September delivery won back 2.82 dollars to 115.83 dollars a barrel.
Brent North Sea crude for September gained 2.06 dollars to 113.21 dollars.
Crude futures had slid to four-month lows on Tuesday after Russia announced the end of military operations in Georgia and the International Energy Agency forecast a steep drop in oil demand in advanced countries.
On Wednesday, the US Department of Energy, publishing its latest weekly snapshot on stockpiles, said that US reserves of gasoline, or petrol, had fallen by 6.4 million barrels in the week ended August 8.
Analysts had pencilled in a drop of only 2.0 million barrels.
"It's maybe the most bullish report we've seen ... all year, just in terms of a one-week surprise," said Brad Samples, an analyst with Summit Energy, who was quoted by Dow Jones Newswires.
Gasoline inventories are closely watched at this time of year as American motorists hit the highways for their summer vacations, pushing up demand for petrol.
Dealers meanwhile added that fears of supply disruption had receded somewhat after Russia and Georgia agreed to a French-brokered peace plan, following Moscow's decision to halt its military offensive.
British energy giant BP said on Tuesday that it had closed an oil pipeline because of the fighting, but that supplies were flowing from the Caspian Sea to the West by other routes.
Also on Tuesday, the Paris-based International Energy Agency said that demand had eased in the 30 advanced economies in the Organisation for Economic Cooperation and Development, which groups industralised nations.
"Demand destruction is a pretty significant fact in the US and OECD," said Jason Feer, vice president with energy analysts Argus Media.
"So I think it looks as though you are starting to see the impact of higher prices" on demand.
Oil prices have sunk since hitting record highs above 147 dollars one month ago as the market frets about weakening demand owing to the slowing global economy.
However, crude futures are more than 15 percent higher than at the start of the year when they surged past 100 dollars for the first time in history.
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