Friday, March 24 2006 10:47 Hrs (IST) - World Time -

Singapore: Oil prices edged closer to the 64 dollar mark in Asian trading today (Mar 24, 2006) as market participants looked to cover their positions after weaker US inventories, dealers said.

At 10:00 am (local time) New York's main contract, light sweet crude for delivery in May, rose seven cents to 63.98 dollars a barrel from its close of 63.91 dollars a barrel in the United States yesterday, its highest level since February 6.

Crude prices had soared 2.14 dollars in New York trading before the close.

The United States Department of Energy (DoE) released its weekly report Wednesday that showed crude oil inventories slipping by 1.3 million barrels last week. Analysts were taken by surprise, having bet on a rise of 2.8 million barrels.

The dip marked the first time US crude supplies had fallen since early February. They are still nearly nine percent above their levels a year ago.

"It's a crazy, crazy, market. The DoE report was fairly bullish so what we are seeing is a delayed reaction in the market," said Tony Nunan, an energy risk manager for Mitsubishi Corp.

The fall in gasoline stocks is particularly bullish for the market as the US summer driving season approaches, analysts said.

Late May is the period where most US drivers head off for vacation.

"The drop in gasoline (petrol) stocks is of particular concern ahead of the driving season, with stocks not as high as the market wants," Sucden brokerage analysts said in London.