LONDON, Jan 4: World oil prices dropped on Wednesday after Russia and Ukraine resolved a dispute that had disrupted gas supplies across Europe.

New York’s main contract, light sweet crude for delivery in February, fell 54 cents to $62.60 per barrel in pit deals.

In London, the price of Brent North Sea crude for February delivery shed 56 cents to $60.79 per barrel in electronic dealing.

Oil prices had closed up more than $2 in New York and London on Tuesday owing to the Russia-Ukraine row having fuelled concerns about Russian energy supplies in general.

“Prices fell back today after the resolution to the Russia-Ukraine gas dispute,” Barclays Capital analyst Kevin Norrish said.

The dispute had erupted when Russian company Gazprom, which controls a third of global natural gas reserves, demanded an immediate rise in Soviet-era gas tariffs paid by Ukraine.

The analysts added that oil prices had been rising also “on increasing concern that gasoline supplies are not going to be sufficient going into the US driving season” later this year.

Analysts in London were predicting that US stockpiles of gasoline in fact rose last week by 400,000 barrels.

However the consensus forecast was for crude inventories to have fallen by 500,000 barrels.

The weekly snapshot of US energy inventories has been delayed by a day owing to the New Year holiday break.—AFP