BUDAPEST, Hungary (AP) _ Crude oil prices fell Monday after a sharp runup late last week. Traders appeared to draw some reassurance from better-than-expected global oil supplies reflected in last week's U.S. petroleum stocks data.
Light sweet crude for September delivery fell 67 cents to $57.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract had risen $1.52 to $58.65 on Friday.
Heating oil dropped a cent to $1.5715 a gallon while gasoline fell nearly 2 cents to $1.7099.
In London, Brent crude for September delivery lost 71 cents to $56.87 a barrel on the International Petroleum Exchange.
``Friday's rally was far too strong and what we see now is a correction in prices,'' said energy analyst Deborah White at Paris-based SG Securities.
Last week's U.S. Department of Energy supply report showed a build in distillate fuels, such as heating oil and diesel, while crude inventories declined less than expected, showing that Hurricane Dennis caused little damage to output in the Gulf of Mexico.
``Prices are peaking more or less now on worries of potential supply shortages in the winter season, but as we get closer to the end of the year I expect these fears to ease considerably, driving prices lower,'' White said.
Increased demand from China in the wake of Beijing's revaluation of the yuan kept markets on the edge, but the Chinese government's prudence in gradually lifting the retail price cap on oil products comforted investors.
``Had China been swifter in loosening the cap, prices would rally incredibly,'' White said.
China cut the yuan's peg to the dollar last Thursday and let the national currency trade in a very restricted float against a basket of currencies. Analysts expect the yuan to appreciate over time, boost the country's purchasing power for oil and other foreign goods.
``China's currency revaluation does help its domestic consumption,'' said Lorraine Tan, research director at Standard & Poor's Investment Services in Singapore. ``With China's currency revaluation, some traders expect its oil demand to move up'' especially in the short-term, Tan added.
Fueling expectations of greater oil demand from China was data released Monday by the government's General Administration of Customs showing that China had bought over 70 million tons of crude in the first half of 2005 _ a 3.9 percent increase from a year ago.
China is the world's No. 2 consumer of oil after the United States and No. 3 importer after Japan and the U.S.
In other news, Venezuela's socialist president Hugo Chavez attributed tensions with Washington to the United States' thirst for control of the world's No. 5 oil exporter's resources.
Chavez said U.S. leaders were in conflict with his government because they wanted ``to assure themselves those resources to support their irrational model of development, which at the same time means underdevelopment and misery for the majority of the world's people.''
But he stopped short of saying whether Caracas intended to whittle down exports to the United States, one of its top sources of income.
Oil prices are about 40 percent higher than a year ago, but more than $3 off their record intraday price of $62.10 a barrel hit July 7. They would need to reach $90 to breach the inflation-adjusted high set in 1980.