LONDON, May 23: World oil prices rose on Wednesday, with Brent crude back above $70 a barrel, after a US government report showed American reserves of motor fuel were weak heading into the peak demand season.

Meanwhile, Algerian Energy Minister Chakib Khelil ruled out an Opec output hike to help bring oil prices down, saying that a recent spike was not the result of crimped supply.

In London, Brent North Sea crude for July delivery gained 50 cents to $70.02 in electronic trading.

New York's main oil futures contract, light sweet crude for delivery in July, added four cents to $65.55 a barrel in US floor trading.

The US Energy Information Administration said gasoline stocks rose by 1.5 million barrels in the week to May 18, but remained “well below the lower end of the average range.” Global Insight analyst Simon Wardell said gasoline stocks should be rising more sharply in May and June, but refinery outages in the United States have stopped inventories from building.

The peak demand season for motor fuel starts at the end of May, when Americans take to the roads on vacation, otherwise known as the US summer driving season.

In London, Khelil was quoted by the APS news agency as telling reporters: “The current spike in oil prices is not a result of insufficient (crude oil) supply.” Speaking on the sidelines of an international energy forum, the Algerian minister who is also vice president of the Organisation of Petroleum Exporting Countries, said: “Opec cannot intervene in problems like cuts in Nigerian production and decide to increase the output of its (other) member countries.”

”The main reason for the present increase is the decrease in distillate stocks, petrol in particular, as a result of shutdowns at some refineries for maintenance.” Inventory concerns, coupled with ongoing unrest in key producer Nigeria, helped push Brent crude up to $70.83 per barrel on Monday -- the highest level since August 31, 2006.

In Nigeria, a Lebanese national was abducted early Tuesday in the country's southern oil city of Warri. The kidnapping was the latest in a series of abductions to hit the restive Niger Delta since militants stepped up their attacks on oil firms and related sectors.

Meanwhile, oil exporter Iran persists in defying UN demands to stop enriching uranium and is expanding the work, the UN nuclear watchdog said in a report on Wednesday that could open the door to new sanctions against Tehran.

“Iran has not suspended its enrichment related activities,” the International Atomic Energy Agency said. Iran denied the findings.

The United States insists that Iran suspend all its enrichment activities in order to allay fears of a covert nuclear weapons programme.—AFP