LONDON, July 10: Oil prices burst higher on Thursday, hitting the highest level for almost four months here on concerns about the outlook for gasoline supplies in the United States.

The price of reference Brent North Sea crude oil for August delivery won 58 cents a barrel to $29.29 in late trading, levels not seen since mid-March.

New York’s benchmark light sweet crude August contract jumped 59 cents to $31.47 per barrel in early deals.

Traders said prices had been driven higher by positive technical factors and concerns about the low levels of gasoline (petrol) stocks, which eclipsed a modest rise in crude inventories reported a day earlier by the US government.

The gasoline market and stocks tend to move into the spotlight during the US summer period as demand typically shows a seasonal increase as Americans take to the roads for their holidays.

“Fundamentally, you’ve got the low level of stocks, particularly of gasoline stocks, and the slower-than-expected return of Iraqi oil in the market,” said Prudential Bache broker Christopher Bellew.

“Then we had this Claudette storm threatening US refineries, but it looks that it has loss a bit of steam,” he added.

Tropical Storm Claudette was brewing in the Caribbean and heading towards Mexico’s Yucatan Peninsula, meteorological reports said earlier in the day.

Oil facilities in the US Gulf of Mexico and southern United States are regularly shut down temporarily as a precaution against severe weather during the US hurricane season.

The market was also strong for technical reasons, traders said.

“Technically, you’ve got funds buying and an encouraging chart picture,” said Mr Bellew.

“When we get bearish information, the market pulls back to a support level and quickly recovers. Whereas when we have a bullish information, it goes up and never has any setback. It is a supportive and constructive market at the moment.”—AFP