Oil and gas futures fell yesterday as concerns about refineries faded and the Organisation of Petroleum Exporting Countries (OPEC) suggested that the oil cartel sees no need to boost production.

Natural gas futures rose on jitters about a developing Atlantic storm system and as traders covered positions ahead of the September contract's expiration today. Gasolene futures have risen in recent days as a number of refinery outages rekindled concerns about fuel supplies.

"The driver here for the past three or four sessions has been gasolene," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

But several of those refinery problems, including a reported outage at Citgo Petroleum Corp.'s refinery in Corpus Christi, Texas, are being quickly resolved. A Citgo spokesman said the company does not comment on operational issues, but Ritterbusch said, "apparently those units are in restart."

Also, a crude distillation unit at Valero Energy Corp.'s refinery in Port Arthur, Texas, has been restarted at a lower rate after downtime of about a week.

And Dow Jones Newswires reported that the processing units at a 330,000-barrel-per-day Chevron Corp. refinery in Mississippi have returned to service.

Gasolene for September delivery fell 2.39 cents to settle at US$2.0154 a gallon on the New York Mercantile Exchange while October light, sweet crude fell 24 cents to settle at US$71.73 a barrel.

In London, October Brent crude fell 40 cents to settle at US$70.55 a barrel on the ICE Futures exchange Oil price between gains and losses after Abdalla Salem el-Badri, secretary general of OPEC, told Dow Jones the oil market is well supplied.

"And it is," agreed James Cordier, president of Liberty Trading Group, in Tampa, Florida, noting that oil inventories are at record levels.

Cordier called Monday's oil and gasolene rally a temporary reversal of a longer-term bear market.

- AP