LONDON (Reuters) – Oil hovered near $77 a barrel on Friday, close to this week’s all-time high, as continued output restraint by OPEC raised concern over tighter fuel supplies this winter.
U.S. oil eased 20 cents to $76.66 by 1000 GMT after rising 33 cents on Thursday. Prices hit a record $78.77 on Wednesday, but fell sharply on signs of improved U.S. refinery operations. London Brent slipped 37 cents to $75.39.
“People are concerned about overall crude and product stocks globally, as demand’s still strong,” said Gerard Rigby of Fuel First Consulting in Sydney.
“Plus there are funds buying, keeping prices bullish.”
Top consumer the United States is worried that as refiners crank up, crude stocks will drain rapidly and tighten supplies.
U.S. Energy Secretary Sam Bodman on Thursday warned that oil prices have placed the world’s largest economy in a “danger zone.” He urged OPEC to raise output when it meets in September.
OPEC officials are also concerned by oil at $80, but with U.S. crude inventories still well above historical norms the group remains reluctant to turn up the taps.
Qatari Oil Minister Abdullah al-Attiyah said OPEC can do nothing about high prices as there was no shortage of crude.
U.S. crude stocks fell by an unexpectedly large 6.5 million barrels last week, while gasoline and distillates rose.
The formation of Atlantic storms this week reminded traders of the approaching peak of the hurricane season, but a tropical wave in the eastern Caribbean was less likely to become a cyclone.