Oil prices rise after slumping

New York's main contract, light sweet crude for September delivery, rose by 46 cents to $124.90 a barrel in electronic deals.     

 Brent North Sea crude for September delivery climbed 51 cents to $125.80 in early London trading.     

Oil prices had tumbled yesterday after a bigger-than-expected increase in US gasoline reserves amid weaker demand in the United States, the world's biggest consumer of energy, traders said.     

Crude futures were also weighed down as Hurricane Dolly in the Gulf of Mexico veered away from offshore oil installations.     

The US Energy Information Administration said Wednesday that gasoline stockpiles had grown by 2.9 million barrels in the week ending July 18, far outstripping analysts' consensus forecast for a gain of 200,000 barrels.     

Gasoline consumption was 2.4 per cent lower compared to a year earlier as drivers faced sky-high gasoline prices of $4.11 a gallon (3.78 litres) during a period when US demand for motor fuel is traditionally at a peak.