LONDON, April 2: Oil prices slid in trading on Friday amid rumours that the US administration was planning to release gasoline reserves onto the market, dealers said.
Officially, US authorities said they were mulling measures to cool a feverish gasoline, or petrol, market while Saudi Arabia pledged to counter any oil shortage.
The price of benchmark Brent North Sea crude oil for May delivery shed $1.10 to $30.45 per barrel in late deals here.
New York's reference light sweet crude May contract lost 32 cents to $33.95 a barrel in early trading, having tumbled by $1.49 on Thursday.
"Prices slid down on rumours of a White House meeting about releasing gasoline reserves," GNI-Man Financial trader Lee Elliot said.
Prices had already eased early on Friday after US Energy Secretary Spencer Abraham told a House of Representatives panel on Thursday that the environmental authorities were considering waiving a clean-fuel requirement in three states.
"If that is confirmed, gasoline prices would fall, pulling down crude oil prices in their wake," said Societe Generale analyst Frederic Lasserre in Paris. "The gasoline market in the United States is very tight, because stocks are low and demand is strong," he added.
The three states require gasoline stations to switch to a costlier, lower emission gasoline in warmer weather, contributing to a spike in prices in the run-up to the summer when roads are busiest.
Also weighing on prices, Saudi Arabian Ambassador to the United States Prince Bandar bin Sultan pledged to avert a shortage of oil after a meeting with US President George W. Bush at the White House on Thursday.
The meeting took place as the Organization of Petroleum Exporting Countries (Opec), of which Saudi Arabia is the biggest exporter, cut back on world production by one million barrels per day for April, a move that threatened to raise already record high US gasoline prices.
Saudi Arabia played a key role in the decision to press ahead with the cut, first agreed in Algiers on February 10, despite calls from the United States for Opec to reverse the move.
"We will not allow any shortage on the world oil market," said the Saudi envoy. "Oil prices should be between $22 and $28 a barrel. Myy government's target is $25. "We will monitor the market closely in the coming days," said the envoy.
Norway, the world's third-largest oil exporter but not a member of Opec, refused on Friday to cut its oil production as the cartel has done, but also ruled out any increase, as the United States would like.
"Norway has no intention of following up with an oil cut," Norwegian Oil and Energy Minister Einar Steensnaes told reporters in Oslo.
Asked whether Norway would raise production to meet US needs, Steensnaes replied: "Sorry. We are producing at maximum capacity. So we are not in a position to contribute to an increase of production."-AFP