World oil holds below $60

Oil prices held below $60 on Tuesday after two sessions of deep losses as mild weather dampened demand across the Northern Hemisphere.
US light crude oil settled up 24 cents at $59.71 a barrel on the New York Mercantile Exchange, after dropping to a three-month low Monday at $58.60 a barrel. London Brent crude fell 23 cents to $57.81 on the International Petroleum Exchange .
"We started coming down at the end of August," said Christopher Bellew of Bache Financial in London. "So, we've been coming down for about 10 weeks.
Oil trends tend to go on for much longer than that, so we have got a continuation of the downward movement, whether on warm weather or on weak demand."
US demand for heating oil was expected to be about 42 percent below normal this week as temperatures remained mild in the US Northeast, the world's largest oil consuming region, the US National Weather Service said on Monday.
In Japan, the world's third-largest oil consumer, where heating demand can soar in winter months, the weather was set to remain normal or warmer than normal the next two weeks.
US crude prices hit a record of $70.85 at the end of August, but have since fallen by more than $11 as the US oil industry recovers from hurricane damage and warm weather further boosts oil inventories.
The recent record crude prices pushed oil company profits to new heights in the third quarter, drawing ire from US lawmakers, who are now calling for a windfall tax to help low-income families face their heating bills this winter.
The chief executives of Exxon Mobil Corp, ConocoPhillips, Chevron Corp, BP Plc and Shell Oil Co will face a joint hearing of the Senate energy and commerce committees Wednesday.
"The problem is there is no way for oil companies to look good in this environment," said Kevin Book, an analyst with Friedman, Billings, Ramsey & Co.
US stockpiles of distillates, including heating oil and diesel, were expected to have risen by 600,000 barrels last week, the first gain in seven weeks, due to recent warm weather, analysts said in a Reuters survey.
They said US government data to be released on Wednesday were also expected to show a gain of 1.3 million barrels in gasoline inventories and a build of 1.6 million barrels in crude stocks.
The world energy supply situation could ease a bit next year as demand cools and Opec's spare capacity increases from historic lows, the US Energy Information Administration said in a monthly report.
The EIA revised downward its estimate for global oil demand growth next year by 100,000 barrels per day to 1.8 million bpd. Growth in 2005 was pegged at 1.1 million bpd, according to the report.
The slowdown in 2006 demand reflects a 100,000 bpd drop in China's expected oil consumption, which the agency said should now rise by 500,000 bpd next year, still more than the 400,000 bpd growth forecast for this year.
The rate of global oil demand growth will slow just as the ability of the Organisation of Petroleum Exporting Countries to produce more crude is expected to increase, the EIA said.
The agency forecast a slight increase in Opec spare oil production capacity next year to 2 million to 2.5 million bpd from this year's 1 million to 1.5 million bpd.
The EIA said this "should allow for some easing of tight oil market conditions in 2006."
Nonetheless, Opec crude oil output is expected "to remain flat" next year at about 30 million bpd, the EIA said.
Oil production from non-Opec countries outside of the United States is forecast to grow by about 700,000 bpd in 2006, with more supply coming from Azerbaijan, Kazakhstan, Canada, Brazil and West Africa, the agency said.