LONDON, July 2: World oil prices fell on profit-taking on Monday but losses were limited by concerns over tight supplies, as the International Energy Agency called for increases to US refining capacity, traders said.

In London, Brent North Sea crude for August delivery lost 21 cents to $71.20 per barrel in electronic deals.New York’s main oil futures contract, light sweet crude for delivery in August, slid 86 cents to $69.82 in US floor trading.

New York crude had struck a 10-month high of $71.06 per barrel on Friday - the highest level since August 28, 2006 - on US supply concerns.

“We are a little bit concerned about the world situation right now,” the IEA director Claude Mandil told a news conference in Madrid on Monday.

Mandil noted that forecasts of strong growth in oil demand during the third and fourth quarter was a worry amid tight supplies.

“Our other concern is that product stocks are low in many developed countries. There will be a need to process a lot of crude,” Mandil said.

“During the past week, we were disappointed to see that many refineries, particularly in the US, seemed not to be able to process” sufficient quantities of crude oil, Mandil said.

The IEA hoped that within a few weeks it would see “a surge in refinery throughputs,” he added.

Oil prices have in recent weeks won support from concerns about refinery utilisation as outages across the United States have created supply problems in the production of gasoline (petrol) from crude oil.

US gasoline stockpiles fell 700,000 barrels to 202.6 million barrels in the week ending June 22, official data showed last Wednesday.

That surprised the market, as analysts had expected a gain of 1.0 million barrels.

Gasoline reserves are in focus because of the US summer driving season when demand typically peaks as many Americans take to the roads for their annual vacations.

Sucden analyst Michael Davies said on Monday, however, that the refinery situation may show improvement when the US government publishes its next weekly snapshot of energy inventories.

“The US Independence Day holiday on July 4 will delay the release of last week's US inventory data until Thursday, with some analysts expecting higher US fuel output after several refineries get back online after maintenance earlier this year,” Davies said.

Elsewhere, it was announced on Monday that China National Petroleum Corp, the Asian nation’s largest oil producer, was to secure a stake of up to 40 per cent in an oil exploration project in northern Sudan.—AFP