June 28, 2007	Thursday	Jamadi-us-Sani 12, 1428

LONDON, June 27: Crude oil prices rebounded strongly on Wednesday, reversing earlier losses after fresh data revealed a surprise decline in stockpiles of motor fuel in the United States, traders said.Gasoline or petrol reserves are currently in focus amid the ongoing US summer driving season where demand typically peaks as many Americans take to the roads for their vacation.

In London on Wednesday, Brent North Sea crude for August delivery jumped 71 cents to $70.88 per barrel in electronic deals.

New York's main oil futures contract, light sweet crude for delivery in August, surged $1.14 to $68.91 per barrel in floor trading.

The US Department of Energy said that American petrol stockpiles fell by 700,000 barrels to 202.6 million barrels in the week ending June 22.

That surprised the market because analysts had forecast a large gain of 1 million barrels.

Gasoline reserves are now running well below the lower end of the average range for this time of year, the DoE added in its weekly market update.

“The draws in the products (such as gasoline and distillates) are bullish,” said Citigroup analyst Tim Evans.

US reserves of distillates, which include diesel and heating oils, sank by 2.3 million barrels. That confounded expectations for a gain of 500,000 barrels.

The DoE added that American crude oil inventories rose 1.6 million barrels last week to 350.9 million barrels, ahead of analysts' consensus forecasts for an increase of 1.5 million.

Despite oil prices falling, concerns remain about refinery utilisation as outages across the United States have created bottlenecks in the gasoline production process.

But the DoE said on Wednesday that refinery utilisation rebounded last week by 1.8 percentage points to 89.4 per cent, compared with the previous week.

Earlier on Wednesday, oil prices had fallen as traders priced in predicted gains to US gasoline stocks -- which failed to materialise.

Crude futures had closed down more than a dollar on Tuesday, owing to expectations of higher inventories and as output increased from key producer Nigeria.

Prices were dampened by news that US energy giant Chevron had resumed operations at its facility in southern Nigeria that was shut down two weeks ago because of community unrest.

Meanwhile, oil has also suffered from a general sell-off across commodities, with precious and base metals prices dropping amid concerns over higher interest rates, sliding equities and worries over the troubled US sub-prime mortgage market, analysts said. —AFP