LONDON, April 18: World oil prices sank on Wednesday after another weekly fall in US motor fuel reserves was overshadowed by news that US refineries have accelerated production following recent maintenance.

The price of Brent North Sea crude for June delivery dropped 40 cents to $65.53 per barrel in London electronic deals, after earlier dunking beneath $65 for the first time since March 27.

New York’s main oil futures contract, light sweet crude for delivery in May, lost 10 cents to $63 per barrel in floor trading.

“The oil market sentiment is pretty negative so the market is seizing on any bearish element” that will drive prices lower, said Calyon analyst Mike Wittner.

He added: “More specifically the market is looking at the number of refinery runs which went up significantly,” he said in reference to increased gasoline production in the United States.

The US Department of Energy (DoE) said ON Wednesday that American refineries upped production capacity to 90.4 per cent in the week to April 13, from 88.4 per cent the previous week. That beat market expectations of 88.9 per cent.

“As soon as refinery runs start to come up, even though demand is stronger, output is going to start to pick up,” Wittner added.

Dealers are watching gasoline stats closely before the summer driving season, starting next month, when many Americans take to the highways for their holidays.

However, US gasoline reserves fell 2.7 million barrels last week. That marked the tenth consecutive weekly decline and was heavier than analysts’ forecasts for a drop of 1.9 million barrels.

The DoE added that US crude stocks fell by 1.0 million barrels, confounding forecasts for a gain of 625,000 barrels.—AFP