Oil prices fell Thursday, after rising more than US$1 a barrel in the previous session on a U.S. fuel supplies report that showed a large, unexpected drop in gasoline stockpiles and a decline in refinery utilization. The benchmark light, sweet crude for June delivery fell 42 cents to US$65.42 a barrel in electronic trading on the New York Mercantile Exchange by mid-afternoon in Europe. The contract on Wednesday gained US$1.26 to settle at US$65.84 a barrel, according to AP. Brent fell 45 cents to US$68.12 a barrel on the ICE Futures exchange in London. Prices eased as Iran's top nuclear negotiator said talks with a senior EU official had brought them closer to «a united view» of how to break a deadlock over Tehran's defiance of a U.N. Security Council demand to freeze uranium enrichment. U.S. gasoline stocks have fallen in recent weeks in part because of low production by refiners, which continued to report trouble. Refinery utilization dropped 2.6 percent, Wednesday's U.S. Department of Energy's petroleum supply report showed. Gasoline inventories fell by 2.8 million barrels in the week ending Friday, which left inventories at their lowest level since October 2005, the report said. Analysts had expected a 200,000-barrel increase. But crude oil inventories rose 2.1 million barrels to 334.5 million barrels. Distillate stockpiles, which include heating oil and diesel fuel, were flat as heating oil inventories fell while diesel stockpiles rose. Despite a surprising buildup in crude oil inventories, traders focused on the fact that gasoline inventories and refinery capacity in use are both falling just before the vacation driving season _ sparking worries about whether refiners can adequately supply summer driving demand. Problems this week at a BP PLC refinery in Whiting, Indiana, and a ConocoPhillips refinery in Wilmington, California, are contributing to supply concerns, wrote Barclays Capital analysts in a Wednesday research note. Heating oil futures dropped 0.138 cent to US$1.8977 a gallon (3.8 liters) while natural gas prices fell 10 cents to US$7.580 per 1,000 cubic feet. -- SPA
