Oil prices down slightly but concerns remain over US gasoline supply

Oil prices showed little movement Friday as a lack of fresh news kept the market within a tight range.

Light, sweet crude for June delivery fell 7 cents to US$61.74 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange.

On London's ICE Futures exchange, June Brent crude rose 6 cents to US$65.85 a barrel.

A day earlier, light, sweet crude prices rose 26 cents amid broader gains in energy futures as traders noticed a gas supply imbalance in Wednesday's government inventory report.

The Energy Information Administration reported that gasoline stocks rose an average of 400,000 barrels last week, the first increase in 13 weeks. But a closer inspection showed much of that increase was due to a 1.1-million barrel increase in inventories on the West Coast only, not across the country.

The news caused gasoline futures for June delivery to jump 9.52 cents to US$2.3261 a gallon on Thursday, and the U.S. national average price of gas at the pump rose to US$3.037 a gallon (80 cents a liter).

With the start of summer driving season only weeks away, analysts are concerned that gasoline supplies, though rising, won't meet demand. Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline stocks since early February. At least a dozen additional partial shutdowns have occurred in the U.S. and internationally that cut refining capacity.

Continued violence in Nigeria, Africa's largest oil producer and a leading supplier to the United States, has also been supporting higher oil prices. Kidnappings continued this week, and militants staged coordinated attacks on three pipelines in the wetlands region, knocking out nearly 100,000 barrels a day of crude oil.

In other Nymex trading Friday, heating oil futures dropped marginally to US$1.8593 per gallon while natural gas prices slid 4.1 cents to US$7.685 per 1,000 cubic feet.