Revised supply drags on oil prices

Tuesday morning’s early rise in crude oil prices were partially offset when the International Energy Agency lowered its forecast for world oil demand in 2005.

With lower demand in Russia, the former Soviet states, and a slowing of demand in China, the IEA lessened its prediction by 50,000 barrels per day.

The IEA also said that oil supplies are higher than previously thought. U.S. gasoline supplies were tight with the summer driving season approaching, but with European inventories high, the IEA did not see this as a concern.

Additionally, fears lessened that second-quarter demand would rise in China, and the prospect of rising oil production from OPEC helped the IEA revise its estimates.