Tuesday, September 27 2005 17:40 Hrs (IST) - World Time -

London: Oil prices fell today (Sept 27, 2005), but remained close to USD 66 dollars on fresh worries that US refineries, battered by hurricanes Rita and Katrina, could struggle to meet demand, dealers said.

New York's main contract, light sweet crude for delivery in November, lost 16 cents to 65.66 dollars per barrel in electronic trading.

In London, the price of Brent North Sea crude for November delivery shed 28 cents to 63.65 dollars per barrel.

Crude futures spiked yesterday (Sept 26, 2005) on concerns that already-stretched refineries in the United States would find it difficult to produce enough heating oil for the world's biggest energy consumer as the northern hemisphere winter fast approaches.

"Supplies of heating oil are very low compared to other supplies of energy commodities," said Dariusz Kowalczyk, a Hong Kong-based investment strategist with CFC Seymour Securities.

"As we near the heating (winter) season, it will exacerbate the problem," he said of the disruptions caused by Rita and Katrina to US refinery operations.

Comments by US President George W Bush that he was willing to tap the US Strategic Petroleum Reserve if needed gave little comfort to the market, dealers said.

Fadel Gheit, an oil analyst with Oppenheimer and Co, said, "The more President Bush talks about releasing strategic reserves, the more we understand that we've got no more production to give."