LONDON, March 29: Oil prices briefly rose to the highest points in almost two months, above $66.0 in New York, on Wednesday after the biggest weekly drop in US gasoline (petrol) inventories since August 2003, analysts said.

Prices later steadied as the market digested news of a rise in US crude stockpiles last week.

New York’s main contract, light sweet crude for delivery in May, fell 17 cents to $65.90 per barrel in pit trading.

In London, the price of Brent North Sea crude for May delivery rose 13 cents to $65.10 per barrel in electronic trade.

However in the immediate aftermath of the latest US energy data, New York crude shot to $66.55 and Brent to $65.66 — the highest points since February 1.

Prices had already rocketed more than a dollar on Tuesday as violence in Nigeria, expectations of falling gasoline inventories and Iran’s nuclear programme fed a speculative frenzy.

On Wednesday, the US Department of Energy (DoE) reported that gasoline stocks had fallen by 5.4 million barrels to 216.2 million barrels during the week ending March 24. Analysts had expected them to fall by only 1.3 million barrels.

The drop comes ahead of the peak demand season for gasoline between May and the end of the northern hemisphere summer, when American drivers take to the roads on vacation.

The DoE meanwhile reported also on Wednesday that US crude oil reserves rose 2.1 million barrels to 340.7 million last week after a decline of 1.3 million barrels during previous week.—AFP