LONDON, Oct 21: World oil prices dropped on Friday, reaching three-month low points in New York on easing supply concerns, analysts said. New York’s main contract, light sweet crude for delivery in December, fell 27 cents to $59.75 per barrel in pit trading.

It reached $59.65 in electronic deals, the lowest level since July 28 and almost 16 per cent below its historic high of $70.85 on August 30.

In London, the price of Brent North Sea crude for December delivery lost 16 cents to $57.75 per barrel in electronic deals.

Prices were under pressure “from Wednesday’s US stock data which showed a larger than expected rise in crude stocks and an unexpected rise in gasoline stocks”, Sucden analyst Sam Tilley said.

They fell also on “signs that Hurricane Wilma will not threaten US oil and natural gas facilities in the Gulf of Mexico”, he added.

Crude stocks rose by 5.6 million barrels in the week to October 14, the US Department of Energy said earlier this week. The figure was almost three times higher than analysts’ forecasts of a 2.0-million-barrel increase.

Gasoline reserves meanwhile gained 2.77 million barrels, compared with market predictions of a 1.2-million-barrel decrease.

Prices were subdued also as Hurricane Wilma appeared likely to avoid the main oil producing and refining areas around the US Gulf of Mexico.

“The market is weak,” said Tony Nunan, manager for energy risk management with Mitsubishi Corporation’s international petroleum business in Tokyo.

“Inventories have built and demand for products in the United States has fallen so that’s sending bearish signals to the market in the short term.”

A stronger-than-expected report on US natural gas inventories also eased concerns about energy shortages going into the northern hemisphere winter.

Natural gas futures, which hit record highs in recent weeks, fell 57.20 cents to $12.977 per million British Thermal Units, data showed on Thursday.

Tilley said Brent crude could soon reach $55 per barrel amid a build-up of heating oil stocks in time for the northern hemisphere winter.

“If stocks do build and demand remains lower then (Brent) prices could hit the $50 per barrel level once again later this year.

“However any signs that heating oil stocks are not going to be sufficient and that winter in the US and Europe could lead to demand outstripping supply will send prices rapidly back up to above $60,” he predicted.—AFP