The season's fifth named-storm, Emily passed by the Gulf of Mexico, sparing US offshore oil platforms and US government data indicating a large build in distillate stockpiles last week, combined with a waning world demand growth forecast have pressurized oil prices southwards. US crude for August settled down at US$60.01 a barrel, and London Brent fell to US$58.27 a barrel.
The 3% spike on Tuesday, largely due to worries that Tropical Storm Emily would disrupt capacity in the Gulf of Mexico's oil-producing region, were easing. The storm is predicted to move south of the concentration of offshore platforms and toward Mexico's Yucatan Peninsula. Last week's Hurricane Dennis briefly shut nearly all of the Gulf of Mexico's oil production.
A report from the US Energy Information Administration showed a rise in the nation's distillate stocks by 3.2 million barrels last week, twice as much as the 1.6 million barrel average rise expected. A decline in US crude stocks of 3.9 million barrels, which was more than the expected 3.5 million, post-Tropical Storm Cindy's disruption of imports, was over shadowed by the build in distillate stocks.
A downward revision was made in the forecast for global oil demand growth this year by 200,000 bpd (1.9%). Price restrictions on transport fuels and power are making it uneconomic for refiners in China to maximize output. A slowdown in China's demand growth has triggered a downward revision in projection for incremental Chinese consumption by 100,000 bpd to 360,000 bpd.
14-Jul-05 
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