March 22 (Bloomberg) -- Oil rose for a third day in New York on signs of increasing demand from U.S. refineries, which need to make more gasoline ahead of the summer driving season.

Gasoline output in the U.S., the world's largest oil consumer, gained for a second week as refinery utilization climbed to a five-week high, according to the Energy Department yesterday. Gasoline inventories fell 3.45 million barrels last week, almost twice as much as analysts in a Bloomberg News survey had predicted.

``Decreasing inventories of petrol before the driving season starts will keep upward pressure on prices for the next week,'' said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. ``Tightening fundamentals and increasing geopolitical risk will keep the price close to $60 a barrel.''

Crude oil for May delivery rose as much as $1.20, or 2 percent, to $60.81 a barrel in after-hours electronic trading on the New York Mercantile Exchange and was at $60.59 at 12:21 p.m. in London.

Gasoline stockpiles declined to 210.5 million in the week ended March 16, the Energy Department said yesterday. Refinery operating rates increased to 86.3 percent, up 0.7 percentage point from the prior week.

``The market is trying to see further upside potential,'' said Kevin Blemkin, a broker at Man Group Plc in London. ``There is a little bit of concern on the gasoline side.''

Brent crude oil for May settlement rose as much as $1.28, or 2.1 percent, to $62.05 a barrel in electronic trading on the ICE Futures exchange and was last at $61.76 a barrel.

U.S. gasoline demand usually peaks during the summer vacations starting Memorial Day in late May. It reached 9.7 million barrels a day in August last year.

Oil Supplies

U.S. crude-oil stockpiles climbed 3.92 million barrels to 329.3 million barrels in the week to March 16, 6.2 percent more than the five-year average for the week, the Department of Energy said yesterday. A gain of 1 million barrels was expected by analysts according to the Bloomberg News survey.

Gasoline deliveries from refineries and terminals rose to 9.24 million barrels a day last week, the highest this year, the Energy Department said. Average demand the past four weeks was 2.1 percent higher than a year ago.

Gasoline for April delivery gained 0.72 cents to $1.9421 a gallon in after-hours trading at 8:18 a.m. in New York. The more actively traded May contract rose 1.32 cents to $1.8985 a gallon.

``Gasoline supplies have fallen for six straight weeks and this is contributing to the rise in energy markets,'' said Kazuaki Ohno, a commodity analyst at Okachi & Co. in Tokyo. ``Concern about supplies in the driving season from late May has supported the oil market.''

OPEC Supply

Expressed in U.S. dollars, the price of the U.S. benchmark crude, called West Texas Intermediate, has fallen about 2 percent in the past 12 months. Oil has fallen about 12 percent in euros and 14 percent in British pounds, and has dropped 2 percent in yen.

The Organization of Petroleum Exporting Countries, whose members produce 42 percent of the world's oil, will provide sufficient oil supplies to meet demand from a ``robust'' global economy, the group President Mohamed al-Hamli pledged today

OPEC has implemented more than 60 percent of the 1.7 million barrels a day in production cuts agreed late last year to prop up prices, he said.

OPEC's oil price may trade between $50 a barrel and $60 a barrel this year, said Hasan Qabazard, director of research division at the group.

OPEC's basket price, a weighted average of 11 blends produced by OPEC nations, rose 27 cents to $56.76 a barrel yesterday.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: March 22, 2007 08:29 EDT