LONDON, May 19: Oil prices fell strongly on Friday at the end of a week in which crude futures have been weighed down by weaker demand for energy and healthy stockpiles of US motor fuel.

In London, Brent North Sea crude for July delivery shed $1.02 to $68.65 per barrel in electronic deals.

New York’s main contract, light sweet crude for delivery in June, dropped 90 cents to $68.55 per barrel in pit trading.

In volatile trade on Thursday, crude futures had risen as geopolitical tensions outweighed fears of a global economic slowdown caused by rising inflation.

Iran, the world’s fourth-biggest crude producer, is locked in a war of nerves with Western powers led by the United States trying to rein in its nuclear programme.

Prices had risen earlier on Friday, owing to “many potential problems still ahead”, said Victor Shum, a Singapore-based analyst at energy consultancy Purvin and Gertz.

“These issues over Nigeria and Iran are not resolved,” Shum added.

Tehran has insisted its nuclear research programme is devoted to civilian energy production, while Washington claims the Islamic republic wants to build a nuclear weapon.

There is concern also over Nigeria owing to civil unrest against foreign-owned oil installations in the country which have cut Nigeria’s crude exports by some 20 per cent.

With the US summer driving season around the corner, Shum added that gasoline or petrol demand was still a concern despite the build up in stocks over the past three weeks.

“There are concerns over gasoline demand and the potential hurricane season,” he added.

The Atlantic hurricane season, starting in June, is being closely watched by the market after Hurricane Katrina last year devastated oil refineries and rigs in the US Gulf Coast region, sending oil prices to then-record high points.

At the start of the week, crude futures took a dive on global markets as traders absorbed forecasts of weakening demand for energy.

They recovered a touch as dealers seized on supply concerns in key crude producers Iran and Nigeria, but fell sharply Wednesday on news of buoyant US motor fuel stocks.

That had eased fears of a gasoline supply crunch during the peak-demand US driving season, starting later this month, when many Americans take to their automobiles for the summer holidays.—AFP