Oil over $68 a barrel

The price of US light crude reached $68 a barrel in Asian trade on Thursday, after the country reported a fall in gasoline stocks. Concern that tropical storm Katrina could jeopardise production in the Gulf of Mexico also pushed up the price. The storm is expected to reach the gulf in the next few days.

In London, Brent crude reached $66.56 before falling to $65.69.

Increased demand from the US, China and India is expected to maintain prices at a high level. The US and China are the world’s largest oil consumers.

The US Department of Energy said that US stocks of gasoline fell by 3.2 million barrels last week to 194.9 million barrels. This is 7% below 2004 levels. However, US supplies of crude oil increased by 1.8 million barrels to 322.9 million barrels, according to the government.

China also said that its imports of crude oil had increased sharply. Imports of crude oil in July totalled 11.1 million tonnes, an average of 2.62 million barrels a day. In the first seven months of this year, oil imports increased 5.4%.

Rodrigo Rato, managing director of the International Monetary Fund, said that the main reasons for the increase are demand forces, particularly from the US, China and India, rather than supply problems, which have usually contributed to price rises in the past. Mr Rato said restricted refinery capacity would keep prices high in the short term.