Oil holds under $68 as Saudi supply worries fade

TOKYO, May 1 (Reuters) Oil held steady on Tuesday as forecasts for a twelfth consecutive weekly decline in U.S. gasoline stockpiles stemmed profit taking from last week's rally triggered by a thwarted plot to attack Saudi oil facilities.

London Brent crude currently seen as more representative of global oil prices than U.S. oil, traded 7 cents lower at .58 a barrel by 0724 GMT, after dropping 76 cents on Monday. U.S.

crude eased 8 cents to .63.

The pullback continued as worries over Saudi supplies faded, which had been sparked on Friday after Saudi Arabia said it had arrested Islamic militants, including trainee pilots preparing for suicide operations against oil and military facilties.

''It was a foiled plot, so it should be somewhat reassuring that it wasn't successful,'' said Gerard Burg, an analyst at National Australia Bank.

Security of oil supplies will be a core topic at a meeting of Asian oil exporters and consumers in Riyadh this week, the Saudi oil minister said in remarks broadcast on Monday.

''The most important thing for consumers and producers is the security of energy,'' Ali al-Naimi said.

Underscoring concerns of regional instability, OPEC producer Iran dismissed on Sunday any suggestion it might agree to partially suspend its uranium enrichment activities as a way toward ending a protracted international stand-off.

Analysts said oil prices are also getting support from gasoline supply worries in the United States ahead of the peak summer driving season. Gasoline futures in New York hit an 11-month high on Monday after refinery shutdowns.

''There's plenty of concerns about the supply of gasoline in the U.S.,'' Burg said.

U.S. gasoline stocks are expected to have fallen last week for the 12th week in a row as a series of refinery snags continued to limit production, a preliminary Reuters poll of analysts showed on Monday.

Stocks of the motor fuel, already down almost 15 percent since the start of February, are seen dropping another 700,000 barrels.

Crude stocks were seen rising 1.4 million barrels, while distillate stocks were projected to have risen 400,000 barrels.

REUTERS PYB KP1415