Oil slips after surge on gasoline anxiety

By Jane Merriman and Janet McBride

LONDON (Reuters) - Oil drifted down from $70 on Friday, after a surge to an eight-month high in the previous session on fears new problems at U.S. refineries could squeeze gasoline supplies already at unusually low pre-summer levels.

China, the world's second biggest oil consumer, raised interest rates to cool its fast-growing economy nPEK358053. But analysts said it could take time to produce any noticeable impact on its oil demand.

London Brent crude slipped 66 cents to $69.60 a barrel by 1452 GMT, eroding some of the previous day's gains of more than $2 or 3.3 percent, the biggest one-day rise since a 5 percent surge in late January.

U.S. crude was up 34 cents at $65.19 having risen 3.7 percent on Thursday.

"By raising rates, the issue, from an oil perspective, is whether or not that's going to affect how energy intensive China's economic growth is going to be," said Harry Tchilinguirian, senior oil market analyst at BNP Paribas.

He said if China's investment into high-energy consuming areas, such as construction, slowed down it could have a moderating effect on its energy demand growth and, at the margin, oil demand later in the year.

A new wave of U.S. refinery problems, plus supply disruptions in Nigeria have intensified concerns about tight U.S. gasoline supplies ahead of peak demand in the summer.

Murphy Oil's (MUR.N) refinery in Meraux, Louisiana had to shut this week for unplanned repairs, while several major plants in Texas have had disruptions.

RECORD LOWS

"U.S. gasoline inventories are at record lows for the pre-summer season," said Tchilinguirian.

"At the same time, you have OPEC supply cuts, plus further disruptions to supply in Nigeria, notably Bonny Light crude that is quite sought after during the summer. All that is bullish for crude prices."

U.S. refiners will have to step up crude purchases during the second quarter just as supplies are tighter due to Nigerian disruptions.

U.S. pump prices recently rose above $3 a gallon -- cheap by world standards but expensive in the view of American drivers.

The United States is competing with west Africa and the Middle East for European gasoline exports and the number of cargoes booked transatlantic has fallen by about a quarter this month, Reuters found.

On top of recent U.S. refinery glitches, BP will shut down a gasoline unit at its vast Texas City plant for an 11-day turnaround, and ConocoPhillips will shut a 67,000-barrel-per-day unit in Texas for a month-long overhaul.