New York Mercantile Exchange (NYMEX) September crude oil futures were 12 cents higher at $12.88 per barrel In Asian trading on the electronic Access system, after overnight data showed US gasoline stocks falling.

The price move reversed some of the 29-cent loss recorded in New York trading overnight, and helped offset a fall of more than one dollar so far this week.

At $12.88, Nymex September crude stands more than $7 below the year ago level of $19.99, weighed down by a global stock overhang.

North Sea Brent futures, trading on the International Petroleum Exchange (IPE) in London, dropped overnight to a 10-year low of $11.55 per barrel on the stock worries.

London's close of $11.55 compares with a year-ago level of $18.85.

The Brent contract, trading on the Singapore International Monetary Exchange (Simex) during Asian hours, wasuntraded.

The rise in Nymex prices in Asia followed a report by the American Petroleum Institute that showed US gasoline stocks fell a hefty 4.123 million barrels last week, much more than market expectations.

"The gasoline number was somewhat supportive, which is bringing crude up also," Joe Troiano, a broker with ED&F Man in New York, said.

However, traders said that the overall level of US gasoline stocks was still up by more than 24 million barrels from a year ago, an overhang which was likely to offer the oil price only a brief breathing space.

Crude stocks in the US rose last week 1.2 million barrels and stand 33 million barrels higher than a year ago.

"We still have a long way to go with the products and the overhang in the crude. It's good we had a pull down in gasoline, which we needed. But it was not enough," Troiano said.

Although London fell to a 10-year low overnight, Nymex is still well above its 12-year low of $11.40 hit on June 15.

Analysts predict that it would take severalmonths for the oversupply in world markets to come into balance, which could keep prices depressed through the critical period of the northern hemisphere winter.

The International Energy Agency (IEA) said on last Friday said it was difficult to see the excessive overhang in stocks resolved "until well into 1999 at the earliest".

It found the Organisation of the Petroleum Exporting Countries was a long way short of meeting production cutbacks agreed in March and June, which were designed to bolster oil prices. A Reuters survey found Opec 63 percent compliant in July with its pledges.

The prolonged weakness of oil prices is largely beneficial for Asia, which imports most of its crude.

But a stock overhang in oil products is keeping refineries under severe pressure from weak profit margins and forcing production cuts in some key centres, like Singapore.

The price of Singapore diesel, the main money earner for most refineries, slumped to a 10-year low of $14.05 per barrel on Tuesday.