They said the loss, a scant 16 cents in two days, does not appear to signal an extended slide after crude oil hit a year high of $17.05 a barrel on Wednesday.

On the New York Mercantile Exchange, crude for May delivery settled Friday at $16.64, down 12 cents on the day. The contract slipped in the morning to the day's low at $16.28, down 48 cents, after a wave of profit taking hit the crude and product futures.

The market's fundamental and technical support remains firm ahead of a three-day holiday weekend for Easter and Passover, analysts said.They said California's problems with tight gasoline supply, stemming from a series of refinery troubles, were far from over.

And globally, major oil producers were poised to cut sales allocations to customers as of Thursday, the official start of an agreement to slice their output by a staggering 2.1million barrels a day. These cuts are the result of an accord ratified last week by 10 members of the Organisation of Petroleum Exporting Countries, in conjunction with pledges by four non-OPEC oil producers - Mexico, Norway, Oman and Russia.

Gasoline futures also surrendered part of their recent steep gains. Gasoline for May delivery ended down 0.92 cent at 53.10 cents a gallon, still clinging to 11-month highs.

Jake Bernstein, an analyst at MBH Commodities, told Reuters Television that despite the day's dip, the market's momentum "remains strong, with relative strength good.

"A lot of people see it overbought, but I don't think that's a fruitful way of looking it," he said, adding that if crude goes down to $15 a barrel, it would be merely a correction.

Meanwhile, the consolidation in the oil industry continued apace, as Anglo-American giant BP Amoco Plc said Thursday it agreed to buy Los Angeles-based Atlantic Richfield Co. (ARCO) in a $26.8 billion all-stock deal, creating the largest private oilproducer in the world. The deal's announcement Thursday signaled time to take profits on oil companies' shares, which had surged earlier this week on the expected merger and a rebound in crude oil prices.