Wednesday, May 10 2006 11:02 Hrs (IST) - World Time -

Singapore: Oil prices retreated in Asian trading today (May 10, 2006)on expectations of a rise in gasoline stocks in the United States, dealers said.

Mid-morning, New York's main contract, light sweet crude for June delivery, was trading at 70.60 dollars a barrel, down nine cents from 70.69 dollars in late New York trades yesterday.

Brent North Sea crude for June delivery was at 71.01dollars, down seven cents. World oil prices have dived in the past week, with Brent plunging from a historic record just below 75 dollars.

"The general expectation is that gasoline inventories will go up, so if that happens, that will prove to be a bearish factor," said Victor Shum, a Singapore-based analyst with Purvin and Gertz.

The United States Department of Energy (DoE) was to release its weekly snapshot of energy inventories today.

Gasoline reserves are in focus ahead of the US summer driving season, when demand for motor fuel traditionally peaks. Last week, the market was caught by surprise when the DoE said US gasoline stocks had risen, rather than fallen.

"The gasoline front is calming down a bit and the US refineries are back on stream after maintenance. However, the real reaction will probably come after the DoE report," he said.

"The worst of the product shortfalls are behind us," said a Societe Generale report released yesterday.