Oil surges above $74 ahead of data

Oil surged above $74 to another 10-month high on Thursday ahead of U.S. data that is expected to show refiners are processing more crude to meet robust summer gasoline demand in the world's top consumer.

London Brent crude, now seen as more representative of the global market, hit $74.26 a barrel, the highest since August 15, 2006, after kicking through the previous 10-month high. At 1118 GMT it was up $1.07 at $74.12.

"Demand is leading the way. It is set to increase steadily year on year. Global GDP growth is very robust and even if it slows, it is still growing," said Mark Mathias, fund manager at hedge fund Dawnay Day Quantum.

"The market for refined product will remain tight and we see upside for gasoline and for heating oil out to December/January," he added.

Analysts polled by Reuters forecast a dip in U.S. crude stocks week on week and a rise in stocks of refined oil products. They also noted strong gasoline sales ahead of the July 4 holiday when millions of Americans take to the roads.

Oil prices have risen to a series of 10-month highs over the past week as investors focus on prospects that the rise in crude oil demand from U.S. refiners could rapidly deplete inventories that are at a nine-year high.

OPEC has resisted calls from the International Energy Agency, representing 26 industrialised consumer nations, to increase production in a pre-emptive move.

The exporter club, supplier of over a third of the world's oil, agreed at two meetings towards the end of 2006 to cut 1.7 million barrels per day from supplies, roughly six percent. It next meets on September 11.

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