Oil prices jumped nearly three per cent Tuesday on signs of tightening US crude supplies.
Benchmark West Texas Intermediate crude rose US$2.60, or 2.9 percent, to US$93.86 per barrel in afternoon trading in New York. Brent crude, which is used to price oil from foreign countries, fell 21 cents to US$111.24 in London.
WTI crude is now at the highest level it's been since early August. That likely won't affect gasoline prices, however, because of a drop in Brent prices. US refineries rely more on Brent than WTI to produce gasoline.
Compared to last year, US motorists are buying much less gasolene. MasterCard SpendingPulse, which tracks retail gasolene purchases in the US, said drivers have cut back at the pump for nearly eight months in a row.
While demand has seesawed over the past months, crude supplies are seen to be continuously thinner, said analysts at Barclays Capital in London.
"The oil-market tightening that started in Europe and Japan has now spread to the US, with US crude and oil-product inventories having fallen at a rate of nearly one million barrels a day over the past month," Barclays said.
On Monday, crude futures moved into so-called backwardation - when the price of oil futures for upcoming contracts is lower than the current month contract - a trading pattern which usually reflects narrowing supplies.
In other energy trading, heating oil and gasolene futures were essentially flat at US$3.0568 and US$2.6647 per gallon, respectively. Natural gas rose six cents to US$3.663 per 1,000 cubic feet.