Oil prices firmer in Asia after records hit

SINGAPORE (AFP) - Oil prices rose in Asian trade Thursday after they briefly hit all-time highs above 78 dollars as plunging US crude inventories stoked supply fears, dealers said.

At 10:06 am (0206 GMT) New York's main futures contract, light sweet crude for delivery in September, was 17 cents higher at 76.70 dollars a barrel from 76.53 dollars in late US trades Wednesday.

The hit a high of 78.77 dollars Wednesday in very volatile trade after the US Department of Energy reported that US crude stocks sank 6.5 million barrels in the week ended July 27 against forecasts for a fall of just 1.13 million barrels.

Brent crude for September delivery was 32 cents higher at 75.67 dollars.

"Increasing crude oil demand and decreasing imports outstripped the market consensus," Societe Generale analysts said of the US stockpiles report.

Wednesday's high topped the previous all-time high of 78.40 dollars set on July 13, 2006 amid violence between Israel and Lebanon.

It also beat London Brent's historic high point of 78.64 dollars per barrel, which was set on August 7, 2006,

The record prompted a renewed call from the International Energy Agency, policy adviser to 26 member industrialised countries, for the OPEC oil cartel to increase production.

OPEC members, who pump about 40 percent of global crude, insists that recent price gains are due to geopolitical reasons and not tight global supplies.

"They don't want to drop a whole lot of crude on the market going into the shoulder season," said Tobin Gorey, a commodities strategist with Commonwealth Bank of Australia in Sydney.

The peak-demand North American holiday driving season will soon give way to a "shoulder" period before demand intensifies for the northern hemisphere winter.

The Organisation of the Petroleum Exporting Countries holds its next output meeting on September 11 in Vienna, Austria.