4 August 2005, 10:20  Oil hovers below $61 after U.S. crude stock build

Oil held steady below $61 on Thursday after sliding from record highs on a surprise build in U.S. crude stockpiles, boosted by hefty imports. Fresh signs that high prices have yet to dampen global economic prospects and U.S. refinery outages that could strain thinning gasoline stocks limited the downside for prices, keeping oil 40 percent higher than at the start of the year. U.S. light sweet crude for September edged up 3 cents to $60.89 in Asian trade, after briefly touching a fresh high of $62.50 a barrel on Wednesday on expectations of falling crude stocks and forecasts for more severe Atlantic storm activity. But near-record import levels lifted crude inventories in the world's top energy consumer by 200,000 barrels in the week ended July 29, the U.S. Energy Information Administration (EIA) said in its report, news that helped rein in the rally. London Brent crude were flat at $59.65 a barrel after falling from record-peaks at $61.26. "This is a healthy correction in the bull market," said Keiichi Sano, assistant manager at Sumitomo Corp.'s commodities business unit. "But there is a potential for prices to move to the upside. Gasoline demand is very strong ... and there are worries over supplies amid refinery trouble in the U.S.," he added. Gasoline inventories fell by 4 million barrels to the lower half of the average seasonal range, the report said. Analysts had projected a much smaller draw of 900,000 barrels. Refiners cut gasoline output last week by 80,000 bpd in the face of refinery outages, while consumption continued to thrive. Among the latest refinery troubles, BP Plc shut two of its three gasoline-making fluid catalytic cracking units at its refinery in Texas City, Texas, this week, Motiva Enterprises shut a crude unit in Norco, Louisiana, and Exxon Mobil Corp. shut its plant in Joliet, Illinois.

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