Crude futures dipped below US$73 a barrel after the International Energy Agency reduced its 2006 world oil demand forecast. Oil prices dipped, but continue to hover around US$72 as concerns about geopolitical threats and refinery glitches were stronger than rising supplies and forecasts calling for weakening global demand.
Natural gas futures declined to their lowest level in almost a year amid rising inventories. The market believes that at this rate the quantity of gas in storage by September will be so much that we will not have anywhere to put it. IEA, in its monthly oil market report says that high prices and mild temperatures curbed U.S. oil demand in the first quarter. Strong exports from countries formerly part of the Soviet Union imples weakening domestic demand.
On the supply side:
Iran refuses to give up its uranium enrichment ambitions and the U.N. Security Council has the power to impose sanctions. Analysts fear Iran could retaliate by withholding oil from the market.
In Nigeria, violence has cut output for months by roughly a half-million bpd.
In the Gulf of Mexico, more than 300,000 bpd remains shut as a result of damage from last summer's hurricane season.
Currently, only Saudi Arabia has any spare production capacity, but it is less than 2 % of daily global demand of almost 85 million barrels and not the high quality crude that refiners prefer.
13-May-06 
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