LONDON, Aug 31: World oil prices climbed strongly on Friday, rising above $74 in New York because of a storm threat to Gulf of Mexico energy installations and already tight supplies in the United States, analysts said.

New York’s main futures contract, light sweet crude for delivery in October, jumped 78 cents to $74.14 per barrel.

In London, the price of Brent North Sea crude for October delivery surged $1.05 to $72.95 per barrel.

“Given some lingering weather concerns and the fact that we are heading into a (US) long weekend, we could end up on a slightly firmer note,” on Friday, MF Global analyst Edward Meir said.

Oil prices were underpinned by a potential storm forming in the Atlantic which re-ignited fears that supply from Gulf of Mexico oil installations could be squeezed.

“Its calculated path still takes it to the eastern Caribbean, an area favourable for strengthening and historically a highway to the US or Mexican Gulf,” said Petromatrix analyst Olivier Jakob.

Meanwhile, a weekly US inventory report released earlier this week lent some support to oil futures. The data showed that gasoline supplies remained well below average and that crude fell by more than the market had expected.

“The situation in gasoline looks particularly alarming,” Barclays Capital analysts said on Friday. “Demand has remained relentlessly strong, whereas production and imports have failed to keep up with growth in demand in the absence of the necessary price signals.” The Department of Energy said Wednesday that US gasoline, or petrol, inventories dived by 3.6 million barrels last week, sharper than the forecasted 2.5 million barrels.

Motor fuel inventories remain far below normal levels as refiners in the United States have struggled to keep up during the peak demand of the holiday driving season, which began in May and wraps up this weekend with the Labour Day holiday.

Oil traders also tracked wider financial markets to see if another round of risk aversion was on the way.

Movement in oil and other commodity prices has tracked the stock market this month, with concern about a global credit crunch leading to volatile trading.—AFP