May 26, 2006	Friday	Rabi-us-Sani 27, 1427

LONDON, May 25: World oil price extended gains on Thursday as the market was caught between conflicting supply issues. New York’s main contract, light sweet crude for delivery in July, rose 54 cents to $70.40 per barrel in pit trading.

In London, Brent North Sea crude for July delivery climbed 65 cents to $69.87 per barrel in electronic deals.

Crude futures rose “after plunging on Wednesday on news of big rises in US gasoline stocks”, analysts at the Sucden brokerage firm said.

“The market is likely to remain unpredictable with support coming from the upcoming hurricane season and ongoing geopolitical troubles with Iran and Nigeria, but pressure on prices comes from signs of slowing demand growth and rises in gasoline stocks,” they added.

Motor fuel stocks are widely watched at the moment as the United States gears up for the summer driving season which starts with this weekend’s Memorial Day break when many Americans take to the roads for a vacation.

Oil prices extended on Wednesday’s losses into Asian trade on Thursday as a jump in US gasoline or petrol stockpiles took the pressure off supply concerns.

The US Department of Energy’s (DoE) latest report showed gasoline reserves rose 2.1 million barrels to 208.5 million in the week to May 19. That was more than the predicted increase of 1.3 million barrels.

The DoE report also said crude oil reserves declined by three million barrels to 343.9 million, three times the fall expected by analysts.

Further falls in the market are likely to be limited by concerns over Iran’s ongoing row with the West over its nuclear research programme.

The fear is that Iran, the world’s fourth-biggest crude producer, could halt exports should the United Nations impose sanctions on the Islamic republic.

Iran insists its nuclear programme is strictly for civilian energy production but the West suspects Tehran is planning to build nuclear weapons.

Forecasts of a potentially devastating Atlantic hurricane season are also keeping the market on edge.

Last year, hurricanes Katrina and Rita devastated oil refineries and rigs along the US Gulf Coast, sending oil prices to then-record high points.

This year’s hurricane season — starting in June and ending in November — would be “very active,” but less severe than in 2005, according to a report issued late Monday by the Miami-based National Hurricane Centre.—AFP