Thursday, March 9 2006 15:01 Hrs (IST) - World Time -

Singapore: Oil prices today(Mar 9,2006) fell below the key US$ 60 level in Asian trade as abundant US energy supplies and OPEC's unchanged production levels lowered supply concerns over Iran, dealers said.

At 1130 AM local time (0900 IST), New York's main contract, light sweet crude for delivery in April, was down seven cents to US$ 59.95 from its close of USD 60.02 in the United States yesterday.

"The US$ 60 level was a good support level but not anymore with production levels high and the (US) inventorieswhich keep building," said Tony Nunan, a Tokyo-based energy risk manager with Mitsubishi Corp.

US crude reserves rose 6.8 million barrels to 335.1million in the week to March 3, way above market forecasts for a rise of 1.5 million barrels.

The news was 'extremely bearish' for prices, Society General analyst Deborah White said.

"Crude is still flooding in despite supply disruptions," she said. US crude oil reserves are about 10 per cent higher than at the same stage a year ago and are at their highest level since May 1999.

US gasoline (petrol) inventories slipped 1.1 million barrels to 224.8 million in a sharper-than-expected fall while distillate reserves, used for heating oil and diesel fuel,fell 2.7 million barrels to 131.4 million, less than the predicted decline of 1.5 million.

Adding to the pressure on prices was the Organization of Petroleum Exporting Countries (OPEC) decision yesterday to keep oil output at a near 25-year high of 28 million barrels per day (bpd).