BUDAPEST, Hungary (AP) _ Oil prices fell below $59 a barrel Monday after Hurricane Dennis spared oil production and refining facilities in the Gulf of Mexico, saving the market from a potential supply disruption at a time of high demand.
It was the third straight trading session in which oil prices fell following last Wednesday's record settlement above $61 a barrel.
Light sweet crude for August delivery declined by 88 cents to $58.75 a barrel in morning trade on the New York Mercantile Exchange.
Oil prices fell last Thursday following the deadly bombings in London out of concern that the economy might suffer, and they dropped again on Friday as it appeared Dennis would be less strong than originally feared.
``We expect the current trend to continue only until today's close or tomorrow morning and after that markets will start focusing on U.S. supply statistics due out Wednesday,'' said Frederic Lasserre, head of commodities research at Paris-based SG Securities. The Department of Energy publishes weekly data on U.S. oil and motor fuel supplies.
Heating oil fell 3 cents to $1.6880 a gallon, while gasoline dropped more than 4 cents to $1.7205.
On London's International Petroleum Exchange, Brent futures for August delivery were down $1.18 to $57.02 per barrel.
Hurricane Dennis caused at least 20 deaths in the Caribbean before pounding the southeastern U.S. coast over the weekend as residents fled its high winds. Traders had feared a repeat of last year's Hurricane Ivan, which damaged oil platforms and caused months of lost production in the Gulf of Mexico.
But the region's oil facilities, the source of 30 percent of U.S. output, weathered Hurricane Dennis largely unscathed.
``The market will continue to expand last Friday's sell-off given that there's minimal damage caused by the hurricane,'' said analyst Victor Shum of Texas-based energy consultants Purvin & Gertz in Singapore.
Adding to bearish sentiment was news that Chinese crude oil imports rose by only 3.9 percent in the first half of 2005, compared to a 39.3 percent increase in the same period last year. Beijing imported 63.4 million U.S. tons (57.5 million metric tons) from January to June, the official Xinhua News Agency reported Monday.
China is the world's second-largest consumer of crude behind the United States.
Shum said he expected prices to slip further in the short term, but said they would rise again because of a perception that supply will be tight over the long term.
``Traders remain on the bullish side given concerns about the tight supplies, especially looking ahead at the fourth quarter. These concerns have not been allayed,'' he said.
Global oil demand is expected to average more than 84 million barrels per day this year, leaving an estimated 1.5 million barrels per day in excess production capacity that can be tapped in the event of a supply disruption.
At the Group of Eight summit in Scotland on Friday, Russian President Vladimir Putin said his country will increase its exports.
Oil prices of around $60 a barrel are expected to shave 0.2 percentage points to 0.3 percentage points off third-quarter growth forecasts in the EU, lowering overall growth in the euro zone to 1.4 percent this year, said Amelia Torres, spokeswoman for EU Economic and Monetary Affairs Commissioner Joaquin Almunia.
Crude oil futures are about 46 percent above year ago levels, though still below the inflation-adjusted high above $90 a barrel reached in 1980.