May 25, 2006	Thursday	Rabi-us-Sani 26, 1427

LONDON, May 24: World oil price slid on Wednesday after official data revealed a strong jump in stockpiles of US gasoline, or motor fuel, last week, analysts said.

Losses were limited however by lingering tensions over major oil producer Iran, with world powers gathered in London to try to agree on a strategy aimed at forcing the Islamic republic to stop enriching uranium.

New York’s main contract, light sweet crude for delivery in July, shed 41 cents to $71.35 per barrel in pit trading.

In London, Brent North Sea crude for July delivery dropped 40 cents to $70.60 per barrel in electronic trading.

US stockpiles of crude oil fell over the past week but closely watched levels of gasoline increased, government figures showed on Wednesday.

The Department of Energy said crude oil reserves declined by three million barrels to 343.9 million in the week to May 19, three times the fall expected by analysts.

But reserves of gasoline (petrol), which are in focus ahead of the US summer driving season starting next week, rose 2.1 million barrels to 208.5 million. That was more than the predicted increase of 1.3 million barrels.

The United States is gearing up for its peak-demand driving season, beginning late May, which sees Americans taking to their vehicles on vacation.

Societe Generale analyst Deborah White said the solid data was evidence that the United States, the world’s biggest consumer of energy, was set to avoid potential supply problems going into the driving season.

“The gasoline problem is absolutely behind us,” she said.

Meanwhile, the DoE said that inventories of distillates, which are used to make diesel and heating oil, rose by 2.5 million barrels to 117.1 million last week. Market watchers had foreseen a much smaller rise of 550,000 barrels.

The drop in oil prices came a day after they closed up nearly $2 in New York, as forecasts of a potentially devastating Atlantic hurricane season prompted renewed fears of damage to US Gulf Coast petroleum installations.—AFP