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Oil Prices Slide As U.S. Supplies Are Called Adequate COMMODITIES MARKETPLACE By Bloomberg

Posted on: Wednesday, 30 November 2005, 15:00 CST

By Mark Shenk

Crude oil and heating oil prices slipped Tuesday on speculation that U.S. inventories are sufficient to meet demand. "The overall supply of crude is very adequate and there is no risk of a shortage out there," said Kyle Cooper, an analyst with Citigroup in Houston. "This is a big change from 2004 and the early part of 2005." The confidence was spurred by a report from the Energy Department that U.S. supplies in the week ended Nov. 18 were 10 percent above the five-year average for the date. Prices have almost tripled in four years on speculation that demand would outpace supply. Crude oil for January delivery fell 86 cents to 56.50 a barrel on the New York Mercantile Exchange. Prices had plunged 19 percent since touching a record $70.85 a barrel on Aug. 30, the day after Hurricane Katrina struck the U.S. Gulf Coast. Oil is also up 15 percent from a year ago.

Heating oil for December delivery fell 2.59 cents, or 1.6 percent, to $1.6097 a gallon in New York, the lowest since July 27. Heating oil reached a record $2.21 on Sept. 1. Prices are up 11 percent from a year ago. Copper prices rose to a fresh record high after U.S. durable goods orders in October increased twice as much as forecast, signaling higher demand. Copper for December delivery rose 2.45 cents to $2.0405 a pound on the Comex division of the New York Mercantile exchange. Copper has gained 35 percent this year. Copper has gained 32 percent this year, reaching records in London and New York, as supplies from mines and scrap yards fell short of demand. "Demand is going to keep on increasing with the world economies improving," said Michael Purdy, a trader at ABN AMRO Bank in New York. Gold reached $502.70 an ounce, its highest since 1987, in Asia before falling back slightly to trade at $499.10, up 80 cents, in New York.

Source: International Herald Tribune

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