Thursday, May 18 2006 12:18 Hrs (IST) - World Time -

Singapore: Oil prices continued to fall in Asian trade today (May 18, 2006) as an increase in US gasoline (petrol) reserves eased supply worries ahead of the US summer driving season, dealers said.

At 10:45 am (0815 IST), New York's main contract, lightsweet crude for June delivery was down 24 cents to 68.45 dollars a barrel from its New York finish.

Brent North Sea crude for June delivery was at 68.87dollars, down 17 cents.

Gasoline supplies are starting to recover," said Mark Pervan, a commodities analyst with Daiwa Securities in Melbourne.

"There are expectations that more supply is on the way," he said.

The US Department of Energy (DoE) said yesterday gasoline stocks rose 1.3 million barrels to 206.4 million in the week to May 12.

Crude oil reserves fell 100,000 barrels to 346.9 million while inventories of distillates, which are used to make diesel and heating oil, slipped 100,000 barrels to 114.6 million, the DoE said.

Fimat analyst Steve Bellino said prices were also falling due to concerns about a global economic slowdown in response to strong commodity prices.

"Commodity prices have been rising for over a year now, gold has broken 700 dollars an ounce, copper is incredibly expensive, all these things together will at some point slow down the economy," he said.

Further sharp falls in crude prices are however unlikely as geopolitical tensions in key oil producers, Iran and Nigeria, remain far from being resolved, dealers said.