Thursday, January 5 2006 09:09 Hrs (IST) - World Time -

New York: World oil prices rebounded here after spending most of the day lower thanks to the end of a dispute between Russia and Ukraine that had disrupted gas supplies across Europe.

New York's main contract, light sweet crude for delivery in February, rose 28 cents to close at US$ 63.42 a barrel yesterday (Jan 4, 2006).

In London, the price of Brent North Sea crude for February delivery increased 33 cents to US$ 61.68 a barrel.

Oil prices had closed up more than two dollars in New York and London on Tuesday owing to the Russia-Ukraine row, which fuelled concerns about Russian energy supplies in general.

Prices retreated for much of yesterday after the neighbouring countries resolved their contract dispute, but Oppenheimer analyst Fadel Gheit said there remained lingering concerns over Europe's reliance on Russian energy.

Buyers also returned to the market on the belief that weekly Government figures out today will show falls in US crude oil inventories, he said.

"The immediate crisis has been averted after Gazprom restored supplies of natural gas to Ukraine but it raised concerns about Europe's long-term dependence on Russian energy amid a lack of readily available alternatives," Sucden analysts said.

The analysts added that oil prices had been rising also "On increasing concern that gasoline supplies are not going to be sufficient going into the US driving season" later this year.