Oil steadied on Friday near $78 a barrel, supported by concern that rising demand will strain supplies already thinned by U.S. refinery glitches and output disruptions in Africa.
The market has rallied to within sight of its all-time peak, spurred by a surprise fall in U.S. gasoline inventories, accelerating economic growth in China and a brief supply outage in OPEC member Angola.
"Oil demand seems to be robust. There is a feeling that the market will become tighter and there is concern about prompt supplies," said Tony Nunan, risk management executive at Tokyo-based Mitsubishi.
London Brent crude for September was up 21 cents at $77.88 by 1100 GMT. Brent hit a record high of $78.65 last August. U.S. crude for August, which expires later on Friday, was up 19 cents at $76.11.
"We should end the week on a stronger note, as there seems little in terms of news that could prompt any meaningful selling," MF Global said in its daily energy report.
Economic growth in China, the world's second-largest consumer, accelerated to 11.9 percent in the second quarter, a 11-1/2-year high, and crude imports in June rose 20 percent from a year ago.
Other Asian economies are also proving resilient to surging energy prices. Crude imports by South Korea, the world's fourth-largest buyer, rose 3.8 percent from a year ago in June.
Rising demand in the United States and a spate of refinery outages have drained inventories in the world's top consumer.
Gasoline stocks, which were expected by analysts to rise, instead fell by 2.3 million barrels in the week to July 13, a government report said on Wednesday.
(Reuters, 20/07/2007)