Oil prices rise before US inventory data

Crude oil prices rose on Thursday on signs that oil demand is picking up in the United States, the world's biggest oil consumer, analysts said as traders awaited key US inventory data. New York's main contract, West Texas Intermediate for delivery in August, climbed 81 cents to $97.46 a barrel. Brent North Sea crude for August gained 94 cents to $114.91 in London deals. The American Petroleum Institute on Wednesday reported a bigger than expected drop in crude reserves, seen as a sign of improved demand in the world's biggest economy. "US crude oil stockpiles fell unexpectedly by 3.2 million barrels, more than analysts' prediction of 2.3 million barrels, which was supportive for crude oil prices," said Ker Chung Yang, commodity analyst at Phillip Futures. However, concerns about future Chinese demand are expected to cap further rises after Beijing on Wednesday raised interest rates for the third time this year as it fights to tame inflation. China, the world's second biggest economy, is the largest energy consumer. The oil market was meanwhile looking ahead to the weekly snapshot of energy inventories to be published by the US government on Thursday, a day later than usual owing to Independence Day at the start of the week.