Oil prices stable after recent spike

Global oil prices held steady on Thursday as traders paused for breath after an overnight rally that was driven by signs of strong energy demand in the United States. Brent North Sea crude for delivery in September rose 12 cents to $116.37 per barrel approaching midday in London, one day after striking $116.72 -- the highest level since May 3. Elsewhere on Thursday, New York's main contract, West Texas Intermediate (WTI) light sweet crude for September, dropped 12 cents to $94.21 a barrel. It had jumped on Wednesday to $94.60, reaching a high point last seen on May 15. The oil market had climbed sharply on Wednesday after the US Energy Information Administration (EIA) said crude inventories plunged 3.7 million barrels in the week to August 10, far heavier than the market had expected. Falling US inventories indicate stronger demand in the world's biggest economy. Analysts said prices were being supported by geopolitical tensions amid fighting in Syria, in the crude-rich Middle East, and major oil producer Iran's standoff with Western powers over its controversial nuclear programme. Concerns about supply shortfalls arising from forthcoming maintenance in the North Sea also sparked higher prices this week. "Besides supply outages in the North Sea and ongoing geopolitical tensions in the Near and Middle East, yesterday's inventory report ... contributed to the renewed price climb," added Commerzbank analyst Carsten Fritsch. In recent days, oil has also gained ground from mounting expectations of fresh stimulus measures from the European Central Bank, US Federal Reserve and Beijing. "The path of least resistance still remains to the upside, in our view, but there appear to be a number of funds looking for a further cycle downwards in Q3 (third quarter)," British bank Barclays added in a market commentary. With Brent oil having risen around $25 over the past seven weeks, "we detect an increasing interest from unhedged money funds to fade the rally", it said. However, the group noted that this is "being held back by the recent renewed market sensitivity to geopolitical headlines".