IEA assessment reduces oil impact

IEA assessment reduces oil impact

The International Energy Agency (IEA) early Tuesday reduced its prediction for world oil demand for 2005, helping to send crude oil prices lower after an initial rise in early trading.

They lessened their projections by 50,000 barrels per day. The IEA cited several reasons for this reduction in projected oil demand, including a decreased demand for oil in Russia and the former Soviet states, a slowing of demand in China, and existence of more oil supplies than previously recognized.

They did not see tight supplies in the face of the upcoming summer driving season in the U.S. as a concern, considering that European inventories are high.

Additional factors playing into the revised IEA projections were the prospect of rising oil production from the OPEC nations and a relaxing of fears that second-quarter oil demand would rise in China.

Meanwhile, in other commodities, gold was a bit higher on Tuesday, but trade was light. In copper, fears created by a lack of supply in Shanghai helped copper hit a record high in Asia. Copper prices there beat Londona��s Monday high by a full $10.

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