LONDON, Aug 1: Oil prices surged higher on Friday after Washington set the weekend as a deadline for key crude producer Iran to reply to an international offer of incentives for a freeze in its nuclear drive.

New York’s main contract, light sweet crude for September delivery, leapt as high as 128.60 dollars per barrel, before pulling back to stand at 126.76, up 2.68 dollars from Thursday’s close.

Brent North Sea crude for September delivery soared as high as 127.94 on Friday. It later stood at 126.20 dollars, up 2.22 from Thursday.

Prior to the news, prices had fallen in earlier trade as weak US economic growth data reignited concerns about slowing demand in the world’s biggest energy consuming nation, traders said.

The US government’s Department of Energy said that gasoline or petrol inventories dropped by 3.5 million barrels in the week ending July 25.—AFP