Monday, May 15 2006 10:53 Hrs (IST) - World Time -

Singapore: Oil prices fell in Asian trade today (May 15, 2006) on a continued reaction to the International Energy Agency's (IEA) decision to cut its oil demand growth forecast for 2006, dealers said.

At 10:25 am (0755 IST) New York's main contract, light sweet crude for June delivery, was at 71.42 dollars a barrel, down 62 cents from late New York trades on Friday.

Brent North Sea crude for June delivery was at 72.32 dollars, down 1.11 dollars.

Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz, said the market was still reacting to the IEA's demand revision.

The IEA, which monitors energy conditions for the world's leading industrialized states and oversees supply arrangementsin times of crisis, on Friday cut its forecast for global oil demand this year and said an increase in Iraqi exports had helped boost worldwide production in April.

Citing mild temperatures in the first quarter and the impact of high prices on consumption, the IEA put average daily demand at to 84.8 million barrels, an increase of 1.5 per cent from 2005 but less than a previous forecast of 85.1 million barrels for this year.

Dealers said the fall in prices was limited by continued supply disruptions in Nigeria and the ongoing Iranian tussle with the West over its controversial nuclear program.

"The Iranian situation is not really cooling off and it's not going away anytime soon. So is Nigeria, and in the market, the long-term view is that oil will remain bullish," Shum said.