Oil prices fell in Asian trading Friday after a big gain Thursday amid concerns that U.S. refineries are still not making enough gasoline to meet demand.
Light, sweet crude for July delivery fell 21 cents to US$66.72 a barrel on the New York Mercantile Exchange midmorning in Singapore.
The contract jumped above US$67 a barrel early Thursday and settled 97 cents higher at US$66.93 a barrel following a U.S. government report that showed refinery utilization fell 1.5 percent last week to 89.6 percent of capacity.
Even an unexpectedly large gain in gasoline and distillate fuel stocks didn't alleviate concerns that the refinery run rates were too low.
Analysts said, though, that the inventory increases weighed on the prices.
Gasoline inventories jumped by 3.5 million barrels in the week ended June 1, according to the U.S. Energy Information Administration's weekly inventory report, handily beating estimates. Analysts polled by Dow Jones Newswires had expected a 1.5 million barrel increase.
Inventories of distillate fuels, which include heating oil and diesel, rose by 1.9 million barrels last week, according to the report. Analysts had forecast distillate stocks to grow by 800,000 barrels.
"Give credit here to imports - both for products and crude - as they come to the rescue of the beleaguered U.S. refinery system week after week, and in so doing, are alleviating market concerns about low utilization rates," said energy analyst Edward Meir at Man Financial.
The U.S. has experienced an unusually high number of refinery outages this spring.
Reports Thursday of a partial shutdown at a 60,000 barrel-per-day Delek US Holdings Inc. refinery in Tyler, Texas, and that Suncor Energy Inc. will shut part of a 246,000 barrel-per-day facility in Alberta for 50 days for maintenance, were the latest outages.
Also alleviating supply concerns was news that Cyclone Gonu spared oil installations in the Gulf of Oman, with analysts saying its effect was minimal. Gonu weakened to a tropical storm and was expected to dissipate into a rainstorm by Thursday night as it moved over the sea toward Iran. It was expected to spare Iran's offshore oil installations, which lie more than 120 miles to the west, oil officials and the U.S. military's Joint Typhoon Warning Center said.
In other Nymex trading, heating oil futures lost 0.24 cent to US$1.9740 a gallon (3.8 liters) while natural gas prices fell 2.5 cents to US$7.80 per 1,000 cubic feet.
The United States does not recognize the entry of Ukrainian territories into Russia. Such a development will seriously complicate prospects for a diplomatic settlement