Oil prices fell $1 late this evening as mild weather in the US kept a lid on heating demand and dealers continued to doubt OPEC's ability to deliver on its agreed crude production cut.
US crude was down 79 cents a barrel at $58.80, while London Brent crude was 51 cents lower at $59.20.
Oil markets failed to hold earlier gains, with a report from the International Energy Agency (IEA) of a big increase in third-quarter stocks and reduced demand for OPEC oil triggering profit-taking of over a dollar on Friday.
The IEA, which represents the interests of consumer countries, said stockpiles in leading industrialised nations filled at a rate of 1.15 million barrels per day (bpd), the biggest third-quarter rise since 1991, after demand in the first nine months grew more slowly than expected.
But it also said markets would tighten more than expected in the fourth quarter, as winter demand rebounds, just as production curbs from the Organization of the Petroleum Exporting Countries (OPEC) begin to bite.
Concerned about high levels of inventory, OPEC decided last month to cut output by 1.2 million bpd from November 1.
Heating oil demand in the US Northeast was expected to be below average during the next five days, according to private forecaster Meteorlogix.
