Oil prices dropped on Friday following confirmation that foreign oil reserves will be made available to the US to reduce the impact of Hurricane Katrina on the industry.

Paris-based International Energy Agency (IEA) said its member countries would release two million barrels a day to help ease the crisis.

All 26 IEA member countries backed measures that will take effect for an initial period of 30 days.

US light crude fell $1.90 to $67.57 a barrel on Friday, having hit an all-time high of $70.85 a barrel on Wednesday.

"Member countries are acting in solidarity with the US in addressing this loss and restoring confidence to the oil market," the IEA said.

The US is already using stocks from its Strategic Petroleum Reserve amid fears of a sharp rise in gasoline prices.

Gasoline futures dipped six cents to $2.3405 a gallon on Friday, although remaining twice as expensive as a year ago.

Brent crude in London also settled back, down $1.66 at $66.06 a barrel.

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