LONDON, 28 September 2006 — World oil prices slid yesterday, falling below $60 per barrel in London following large weekly increases to US stockpiles of distillates and motor fuel, dealers said. New York’s main contract, light sweet crude for delivery in November, shed 56 cents to $60.45 per barrel in pit trading.

In London, Brent North Sea crude for November delivery lost 51 cents to $59.61 per barrel in electronic deals after dropping as low as $59.45 - not far off Monday’s low of $59.32.

Prices had slumped Monday to six month troughs below $60 as concerns continued to diminish over there possibly being tight energy supplies in the coming months.

The US Department of Energy said yesterday that reserves of gasoline or petrol showed an increase of 6.3 million barrels to 213.9 million in the week to September 22.

That was almost six times analysts’ consensus forecasts. “The amazing thing in this week’s numbers was the gasoline build,” said Societe Generale analyst Deborah White.

Inventories of distillates, used for heating oil and diesel fuel, jumped by 2.6 million barrels to 151.3 million - nearing an eight-year high — compared with forecasts of a gain of 2.5 million.

Ahead of the northern hemisphere winter, the market’s focus is on the level of distillate inventories, which include heating fuel.

Crude oil reserves, meanwhile, fell a modest 100,000 barrels to 324.8 million. Financial markets were expecting a drawdown of 1.7 million barrels. “A huge gasoline build, sizable distillate build and slight crude draw make this a price bearish report,” added Wachovia Securities economist Jason Schenker.

Despite the bearish news, prices held close to the “psychological” barrier of $60, according to White.

“There’s pretty good psychological support at 60 so people tend to buy on the dip,” she noted.

Traders were meanwhile weighing calls from the head of the Organization of Petroleum Exporting Countries for the organization to take action to prevent further price declines.

Speaking Tuesday, OPEC President and Nigeria’s Oil Minister Edmund Daukoru said oil prices are “very low”. Addressing reporters in Abuja, Nigeria, he added: “We are already talking among ourselves in the OPEC fold... Something needs to be done to steady the price.”

OPEC kept its official quota steady at 28 million barrels per day at its last meeting in September, but said it could call an emergency meeting if necessary. The next meeting is due on Dec. 14 in Abuja.