Oil prices fell 2 per cent towards $58 a barrel today as worries about damage to US oil and gas facilities eased following the passage of Hurricane Dennis.
US crude for August delivery dropped $1.33 to $58.28 a barrel, extending losses of $1.10 on Friday and down from last week's record $62.10. London's Brent crude shed 83 cents to $57.37 a barrel.
Hurricane Dennis raced ashore on the US Gulf Coast on Sunday, leaving production companies to start restoring the 42 per cent of Gulf oil supply and 27 per cent of natural gas output that was shut as a precaution.
Several producers said they expected to resume operations today.
Traders said crude speculators on the New York Mercantile Exchange, who increased their net buying positions in the week ended July 5th to 32,758, were offloading positions, hitting prices.
In addition, Chinese demand growth is lending less support to oil prices. The world's second biggest energy consumer after the United States and one of the main drivers of last year's oil price rally, is seeing a sustained slowdown in oil demand growth.
Crude imports into China dipped to 2.7 million barrels per day in June from 2.74 million bpd last year as flagging demand and retail price caps prompted refiners to cut processing rates and draw from domestic stockpiles.
China's apparent oil demand had contracted over 4 per cent in May from a year earlier as refiners rushed to export oil products, while Sinopec, the country's top refiner, has also been reselling millions of barrels of foreign crude.