Oil prices rose today as traders absorbed a sharp drop in US stocks of gasoline and strong demand in the world's largest consumer.
After an initial lurch downwards yesterday when the US government data was published, international benchmark Brent crude oil rose 25 cents to $29.43 per barrel. US crude futures climbed 20 cents to $31.41.
"Wednesday's profit-taking was a knee-jerk reaction, but this is a more considered view of the data," said Mr Steve Turner of Commerzbank Securities.
According to the government figures, gasoline stocks fell to their lowest level for almost three years while demand soared ahead of the Labor Day holiday that traditionally marks the end of the US summer driving season.
Low inventories have pushed US pump prices to a record $1.75 a gallon as more than 28 million Americans plan long road trips for the Labour Day weekend.
"The strong demand data are bullish for weeks to come," Mr Turner said.
Global stock levels have been below normal since the beginning of the year because of a series of export disruptions from Venezuela, Nigeria and Iraq.
Venezuela and Nigeria are still pumping below optimum levels, and occupation powers in Iraq face stubborn sabotage and looting in their efforts to restore output.
Having slumped during the war in March and April, Iraqi production has recovered to 1.7 million barrels per day, roughly two-thirds of pre-war levels.
But exports have been volatile this month as sabotage and looting have hit pipelines and power supply.