Oil prices fell by about $1 a barrel in the third week of June, in line with other global commodities and on the back of a report from the International Energy Agency (IEA) generally interpreted as bearish. Spot Brent was trading at $65.2 a barrel on 14 June, compared with $66.2 a barrel a week earlier.
The IEA's monthly report, released on 13 June, hit the headlines for its data on OECD crude stocks, which in April rose by 17 million barrels to reach 2,631 million barrels their highest level in 20 years. However, the rapid rise in world demand over that period makes the forward cover position less impressive, at 54 days, and the strong increase in inventories was partly due to heavy refinery maintenance. The agency's demand growth forecast for 2006 was broadly unchanged at 1.24 million barrels a day (b/d). 'Recent strength in China and the US is partly offset by weakness in OECD Europe and Asia,' said the report. 'A booming global economy remains supportive, but high prices are weighing on consumption.' April demand rose by an unexpectedly strong 9.6 per cent in China. US stock data released on 14 June was mixed. Crude supplies fell by 0.3 per cent to 345.7 million barrels in the week to 9 June, but gasoline stocks which are being watched more carefully by traders at present rose by 1.3 per cent to 213.1 million barrels.