Oil falls below $60 amid US distillates rise

Oil prices edged below $60 a barrel today amid a healthy increase in US distillate stocks, but traders kept a wary eye on the…

Oil prices edged below $60 a barrel today amid a healthy increase in US distillate stocks, but traders kept a wary eye on the movement of Hurricane Emily over the Caribbean.

The market was also pushed lower after the International Energy Agency, an energy adviser for 26 industrialised nations, cut its projection for world oil demand this year.

US light sweet crude for August delivery dropped 27 cents to $59.74 a barrel, extending a loss of 61 cents in New York yesterday.

London Brent crude was down 27 cents to $58.00 a barrel. Distillate stocks in the United States posted a larger-than-expected build of 3.2 million barrels to 120.4 million barrels last week, bringing them into the upper half of the average range for this time of year, the Energy Information Administration (EIA) said.

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Crude stocks fell by 3.9 million barrels, more than forecast, to 321 million barrels, but was "well above the upper end of the average range for this time of year", the EIA said.

The Paris-based International Energy Agency (IEA) revised down its forecast for global oil demand growth this year by 200,000 barrels per day (bpd) to 1.58 million bpd, as high prices began to hit demand growth in China and the US.

The IEA lowered its forecast for China's demand growth this year by 100,000 bpd, or 5.5 per cent, to 360,000 bpd.