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Oil prices drop on concerns about buildup of crude oil supplies

Oil prices drop on concerns about buildup of crude oil supplies

Oil prices fell in Asian trading Tuesday, extended their slide from the previous day on worries of a glut of oil building up in the supply chain for refineries.
Light, sweet crude for June delivery dropped 11 cents to US$65.60 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange.
In New York trading on Monday, prices fell 75 cents to settle at US$65.71, while gasoline prices rose on reports of another series of U.S. refinery problems.
Brent crude for June on London's ICE Futures exchange was down 5 cents to US$67.60 a barrel.
Analysts attribute some of Monday and Tuesday's fall in oil prices to profit-taking from Friday's big rally, when crude surged above US$66 a barrel after Saudi Arabia announced the arrests of 172 Islamic militants, some of whom allegedly planned to attack oil fields.
The refinery problems put more pressure on U.S. gasoline inventories, which have fallen for 11 weeks in a row. Last week's U.S. Energy Department report showed an unexpected drop of 2.8 million barrels in U.S. gasoline stockpiles and said U.S. refinery use declined to 87.8 percent of capacity.
With the start of the summer driving season about a month away, some analysts wonder whether gasoline supplies will be adequate to meet demand.
The market is also watching events in Nigeria and Iran _ key producers where current events have raised concerns about supply disruptions.
Nigeria's oil-rich Niger delta has seen an upsurge of armed violence in recent years, most of it the kidnapping for ransom of foreign oil workers. President-elect Umaru Yar'Adua has pledged that securing the region is a major priority of his government, which takes office May 29.
In other Nymex trading Tuesday, heating oil futures were down .48 cent to US$1.8900 a gallon, while natural gas prices fell 6.8 cents to US$7.795 per 1,000 cubic feet.


Updated : 2021-04-14 06:08 GMT+08:00