Oil prices climb on lower stockpiles and tension

Oil prices rose yesterday after a sharp drop in US crude reserves and unrest in oil exporters Iran and Nigeria, traders said. New York's main futures contract, light sweet crude for delivery in July, advanced 33 cents to $71.36 a barrel. Brent North Sea crude for August delivery was up 32 cents at $71.17. Analysts said a sharp decline in US crude inventories showed energy demand was partly improving in the United States, the world's biggest energy consumer. The weekly US Department of Energy (DoE) report released on Wednesday showed crude stockpiles falling for the second week running, by 3.9 million barrels, far sharper than analysts' predictions. The data was "a mixed bag", said ODL Securities analyst Marius Paun. "A larger than expected draw in crude inventories signalled rising demand but supply remained still abundant with the surplus way over the five years averages, helped by a much larger-than-anticipated build in gasoline stocks." Paun said that after "crunching the numbers, market participants decided to [buy] crude, encouraged also by a weaker US dollar. "The effect was a rebound in price but further runs into high territory will probably need the assistance of additional weakening in the dollar and, or extended gains in the equities market." The market was also following developments on the political front. In oil-producing Iran, the country's opposition plans a day of street marches and mourning for protesters killed in post-election violence, keeping up the pressure on the Islamic regime over the disputed vote. Facing their biggest crisis since the 1979 revolution, the country's rulers have gone on the offensive, arresting protesters. Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here .