Oil prices down as worries ease

LONDON - World oil prices fell yesterday when fears of a supply shortage eased after a rise in US crude-oil inventories.

Traders said they were awaiting an announcement from the US Energy Department on the winning bids for borrowing crude oil from the strategic petroleum reserve.

Energy Secretary Bill Richardson said the announcement would come after the New York oil futures market closed.

But Opec president and Venezuelan oil minister Ali Rodriguez predicted the US would have difficulty selling crude oil from its stockpile and said there was no supply problem.

"I insist the problem is not crude oil availability but refining capacity, refinery utilisation," he said.

Oil prices have fallen from a 10-year peak of $US34.98 for Brent on September 18, helped by the decision to release emergency supplies.

The European Commission said on Tuesday that the criterion for the release of European reserves countries - shortages of supply - had not yet been met.