By Neil Hume in London

US oil rose above $100 a barrel for the first time since October in the wake of government figures that showed another large decline in US crude inventories.

Nymex February West Texas Intermediate rose more than 1 per cent to $100.56 a barrel, its highest level in two months, on the back of the data, which was interpreted as a sign of stronger demand in the world’s top oil consumer.

A report from the Energy Information Administration showed commercial crude stockpiles falling 4.7m barrels to 367.6m in the week to December 20. Analysts had forecast a drop of 2.65m barrels.

The data also showed US domestic oil production had reached 8.11m barrels per day last week – the highest level since September 1988. US oil output is surging thanks to fast-growing production from shale rock formations such as the Bakken in North Dakota and Eagle Ford in Texas.

“This is the fourth week in a row of really significant draws in US crude stocks,” said Amrita Sen, analyst at Energy Aspects, a consultancy, adding the figures were in line with recent “supportive” macroeconomic data. “Underlying demand is good and picking up,” she said.

Over the past month, commercial crude stockpiles in the US have fallen by nearly 24m barrels – erasing nearly two-thirds of the inventory increase that occurred in the preceding 10 weeks. This has helped WTI, the US benchmark, rally from $91 over the past month.

US oil prices fell sharply during October and November on concerns a glut of crude was building in the Gulf Coast as new pipelines and infrastructure allowed more shale oil to flow to the world’s largest refining centre.

But the EIA report showed crude oil stocks at the Gulf Coast had fallen 5.2m barrels last week as refineries increased utilisation to 95.6 per cent of capacity – the highest level in a year – to meet increased demand. US gasoline demand has averaged 8.85m b/d over the past four weeks, up 3.9 per cent from the same period a year ago, according to the EIA report.

Meanwhile, Brent, the international oil marker, rose above $112 a barrel for the first time in three weeks, helped by a weaker US dollar and concerns about further supply disruptions. ICE January Brent rose as much as 0.75 per cent to $112.80

Escalating violence in South Sudan is threatening to reduce the country’s crude supply further, adding to outages in Libya and Nigeria.

The cumulative loss of production in Africa, which has replaced the Middle East as the focus of concern over global oil supplies, is now hovering at about 1.5m b/d. This is well above the total incremental increase in oil production this year from the US, which analysts estimate will be around 900,000 b/d. These supply disruptions have helped support Brent, which is on course to average around $109 this year.

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