Oil falls towards $58 after Hurricane Dennis Monday 11 July 2005, 6:24am EST
LONDON July 11 (Reuters) - Oil prices fell 2 percent towards $58 a barrel on Monday as worries about damage to U.S. oil and gas facilities eased following the passage of Hurricane Dennis.
U.S. 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.
"People perceived that the hurricane may not be as damaging as Hurricane Ivan. That's why people are taking profits, but the true extent of the damage is not known yet," said Tony Nunan, a manager at Mitsubishi Corp.'s international energy business.
Hurricane Dennis raced ashore on the U.S. Gulf Coast on Sunday leaving production companies to start restoring the 42 percent of Gulf oil supply and 27 percent of natural gas output that was shut as a precaution.
Several producers said they expected to resume operations on Monday.
Traders said crude speculators on the New York Mercantile Exchange, who increased their net buying positions in the week ended July 5 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 percent 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.
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