Eye on the board: crude eased back in European trade this morning
Crude slows down after record start
Futures eased lower in European trade today after profit taking on the back of this morning's record highs.
September Brent was down 35 cents at $63.64 a barrel at 1100 GMT. The contract hit a record high of $64.57 a barrel earlier, and rose over $2 on Wednesday.
US light crude for September delivery was down 40 cents at $64.50 a barrel after hitting a record of $65.30 earlier.
"There is a bit of profit taking after the strong rise yesterday," one trader told Reuters. "The market is very nervous at these levels."
The monthly oil market report from the International Energy Agency (IEA), released today, sent mixed signals to the market, traders said.
"The IEA report is pretty indeterminate really, it's difficult to say if its bearish or bullish," one trader said.
On the bullish side, the IEA cut its non-Opec crude supply growth for 2005 by 205,000 barrels per day to 675,000 bpd.
Unscheduled outages in the US Gulf of Mexico, Mexico, Norway and the UK accounted for 150,000 bpd of the cut, while lower than expected production from Russia, Africa and the Asia-Pacific region also contributed.
On the bearish side, the IEA cut its China demand forecast for 2005 by 40,000 bpd.
Oil demand growth for the year is still expected to be strong at 4.9%, but is down from the breakdown 15% growth rate of last year that pushed global oil prices to record highs.
Brent rose over $2 yesterday on concern of tighter supply from the North Sea in September and after US government data showed gasoline stocks fell more than expected last week.
US government inventory data showed gasoline stocks fell 2.1 million barrels, compared to expectations from analysts for a fall of 1.9 million barrels.
The fall was the sixth consecutive for gasoline stocks, and came despite the largest weekly imports of gasoline so far this year.