Friday, May 5 2006 11:10 Hrs (IST) - World Time -

Singapore: Oil prices rebounded to above 70 dollars in Asian trade today (May 5, 2006) after falling more than two dollars overnight following a surprise increase in US petroleum stockpiles, dealers said.

"Prices however remained volatile with the row over Iran's alleged ambitions to develop a nuclear weapon and the continuing separatist threat in oil-producing Nigeria lurking in the background," they added.

At 0905 IST (11:35 am) , New York's main contract, light sweet crude for June delivery was up 47 cents to 70.41 dollars a barrel from its close of 69.94 dollars in New York where prices had fallen 2.34 dollars.

London's Brent North Sea crude for June delivery was at 70.01 dollars, up 72 cents.

Prices began tumbling after a buoyant weekly stocks report from the US Department of Energy (DoE) on Wednesday, which eased concerns about shortages of gasoline in the United States.

US crude oil reserves in the world's biggest economy rose 1.7 million barrels to 346.7 million barrels in the week to April 28. Analysts had expected a fall of 150,000 barrels.

Gasoline, or petrol, reserves, which are in focus ahead of the US summer peak driving season, rose 2.1 million barrels to 202.7 million. Markets had bet on a fall of 650,000 barrels.

"The market remains volatile and reactive to shorter term events," said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

"The market now is focussing on some of the factors affecting gasoline supply in the US market," he said.