• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Oil Trades Below $60 on Warm U.S. Weather

Posted on: Tuesday, 8 November 2005, 06:00 CST

By GEORGE JAHN

VIENNA, Austria - Crude-oil futures traded Tuesday at levels well under $60 a barrel, as forecasts of warmer-than-usual weather in the U.S. further eased concerns about rising heating fuel demand.

Analysts said expectations of stock builds in U.S. inventory figures due for release Wednesday also supported the downward trend.

Light, sweet crude for December delivery rose 9 cents to $59.56 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. The contract settled Monday at $59.47 a barrel, down $1.11.

In London, December Brent crude futures on the ICE Futures exchange fell 33 cents to $57.71 a barrel.

December Nymex natural gas fell by more than 9 cents to $11.780 per 1,000 cubic feet.

Traders said many market participants were expecting a warmer winter in the United States this year, amid weather forecasts showing higher temperatures there.

"Warm temperatures across the Midwest and the Northeast is pressuring prices in the short run," Phil Flynn of Alaron Trading Corp. said in a research note.

Accuweather.com's latest U.S. weather report issued Monday said "the south-central part of the nation will feel more like the middle of summer than the middle of autumn Tuesday."

"The result will be record-challenging warmth from central Texas into the mid-Mississippi Valley," the report said, adding temperatures in many places will reach highs of 80 degrees Fahrenheit.

But Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures, said the crude contract was likely to trade in the range of $58-$62 a barrel until there were clearer indications of how cold the Northern Hemisphere winter would be.

"It's still very difficult to tell what the situation in winter will be, but as soon as colder weather comes along, prices would definitely go up," Emori said.

Nymex heating oil for December delivery edged higher to $1.7895 a gallon while gasoline gained half a cent to $1.5610.

Vienna's PVM Oil Associates predicted a crude stock build of 1.4 million barrels when U.S. inventory figures are published tomorrow "due to increasing crude oil production in the U.S. ... combined with heavy imports."

Just over half of the oil production and 45 percent of natural gas output remained off line Monday, the U.S. Minerals Management Service said.

---

Associated Press Writer Gillian Wong in Singapore contributed to this report.

Source: Associated Press/AP Online

More News in this Category