US cranks up petrol output as oil falls below $73 a barrel

OIL fell below $73 a barrel yesterday as refiners in the United States cranked up gasoline output, easing supply crunch worries ahead of the peak demand summer driving season.

London Brent crude was down 25 cents at $72.96 a barrel at 1459 GMT.

US light crude futures fell 8 cents to $72.75.

US refiners produced 375,000 barrels per day (bpd) more gasoline last week than the week earlier, government data showed. That prevented gasoline stocks from falling as much as analysts had forecast last week.

“What the numbers are telling us, with refinery runs going up by a big margin, is that it seems refineries are turning the corner and the worst fears anticipated before the release of the data have been somewhat muted,” said Phil Flynn, analyst at Chicago-based Alaron Trading.

Gasoline stocks still fell 1.9 million barrels, marking the eighth consecutive week of declines, but analysts polled by Reuters had expected a fall of 2.6 million barrels.

Stocks have fallen in part because refiners were emptying out storage tanks ready for the introduction of cleaner-burning fuels in May.

US president George W. Bush on Tuesday called for waivers on the new clean fuels. In measures aimed at bringing down oil prices, he called for a crackdown on profiting at the pump and a temporary halt to deliveries of crude to the US Strategic Petroleum Reserve.

Analysts were unimpressed. The SPR delivery halt would only add about 2.1 million barrels of crude oil to the market in May. That is equivalent to just two or three hours of US daily demand of 21 million barrels per day.

“It’s a bit like moving deckchairs around on the Titanic,” said Mark Mathias, managing director of Dawnay Day Quantum hedge fund. “These measures are cosmetic and insignificant in the grand scheme of things.