Thursday, July 21 2005 11:36 Hrs (IST) - World Time -

New York: World oil prices have weakened as traders digested a smaller-than-expected drop in US crude inventories despite hurricane conditions in the Gulf of Mexico.

New York's main contract, light sweet crude for delivery in August, lost 74 cents to end at $56.72 a barrel. The contract expired yesterday (July 20, 2005).

The New York contract for September slipped 67 cents to $58.02.

In London, the price of Brent North Sea crude oil, for delivery in September, lost 71 cents to $56.65 a barrel.

"It wasn't as much a crude draw as we were waiting for and there was a greater build in distillates than expected. Imports also increased," Fimat analyst Mike Fitzpatrick said.

The Department of Energy said that United States (US) crude oil stocks fell by 900,000 barrels to 320.1 million barrels for the week ending July 15.

Analysts' forecasts were for a 3.45-million drop in the wake of production shutdowns in the Gulf of Mexico caused by Hurricane Dennis, whose onset halted most US oil production in the region around July 10.

"The figures were a shocker", Societe Generale analyst Deborah White said.

"Obviously it was bearish (for) crude. We had expected a significantly steeper draw, something more like four times as deep a draw as we saw."

The DoE also said petrol or gasoline stocks dropped by 1.3 million barrels, less than forecasts of a 1.5-million decrease.