Oil prices were on the rise this afternoon after the Chinese government said that the country’s fuel consumption rose 7.2 percent in the first half.

The data was seen as a sign that demand for oil from the world’s second largest energy consumer is rising despite a string of monetary tightening moves by the Chinese government in an attempt to curb inflation.

In addition to the Chinese data, oil prices were supported by expectations of a decline in US oil inventories and today’s rally in stock markets in Europe and the US.

The US Department of Energy is set to release its closely watched inventories report tomorrow. Last week’s data revealed a bigger than expected decrease of 3.1 million barrels to 355.5 million barrels.

Analysts polled by Bloomberg have projected that tomorrow’s data will show another massive drop, taking off a further 1.5 million barrels off the US crude stockpiles.

Meanwhile, stocks were buoyant today as fears over Europe’s debt problems faded amid optimism over Thursday’s summit of Europe’s top officials to discuss a new financial aid package for Greece.

Most euro zone countries saw their borrowing costs rise yesterday after Italy’s 10 year bond yields hit 6 percent.

The prospect of a debt default by Italy spooked investors as Italy is the euro zone’s third largest economy holding debt that is three times bigger than that of Ireland, Greece and Portugal combined.

US light, sweet crude for September delivery rose US$1.52 to US$97.77/barrel in morning trade on the New York Mercantile Exchange (NYMEX).

September Brent crude climbed US$1.51 to trade at US$117.83/barrel on the ICE Exchange.

Today’s top risers in the oil and gas sectors were:

TXO (LON:TXO), up 15.5 percent at 0.694 pence at midday

Xcite Energy (LON:XEL), up 11 percent at 166.56 pence

Aurelian Oil & Gas (LON:AUL), up 8 percent at 64.75 pence

PetroLatina (LON:PELE), up 7.5 percent at 29 pence

Rockhopper Exploration (LON:RKH), up 5.5 percent at 230.75 pence

The top fallers were:

Woburn Energy (LON:WBN), down 10 percent at 2.25 pence at midday

Matra Petroleum (LON:MTA), down 9 percent at 2.45 pence

Westmont Energy (LON:WTE), down 7 percent at 26 pence

Spitfire Oil (LON:SRO), down 7 percent at 7.1 pence

Roxi Petroleum (LON:RXP), down 6.5 percent at 3.85 pence