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Oil Prices Soar As Cold Weather Offsets Effort to Hold Output Steady

Posted on: Tuesday, 13 December 2005, 09:00 CST

Oil prices soar as cold weather offsets effort to hold output steady

NEW YORK, Dec. 12 (Xinhua) -- Oil prices jumped by nearly two dollars a barrel Monday as forecasts for deepening cold weather in the US northeast offset a decision by the OPEC cartel to maintain its output quota.

Light sweet crude for January delivery on the New York Mercantile Exchange rose 1.91 dollars to settle at 61.30 dollars a barrel.

Traders were also keeping an eye on an enormous fire at a fuel depot north of London, which holds some 5 percent of Britain's fuel stocks.

In London, the price of Brent North Sea crude for January delivery soared 2.13 dollars to end at 59.44 dollars a barrel.

Gasoline futures gained 4.19 cents to settle at 1.6468 dollars a gallon.

The Organization of Petroleum Exporting Countries, meeting in Kuwait, maintained its production quota at 28.0 million barrels per day (bpd) and decided not to renew its offer for emergency extra output of 2.0 million bpd.

The widely expected decision was reached at Monday's OPEC ministerial policy and production meeting and made public by Libyan Oil Minister Fathi Hamed Ben Shatwan. The group, however, reserved the right to consider cuts in early 2006 should robust demand flag and high prices fall.

Also Monday, the US government dramatically lifted its long- term forecast for oil prices but said US dependence on foreign energy should go up only modestly.

The Energy Information Administration (EIA) predicted that based on 2004 values, the price of a barrel of imported light, low- sulphur crude oil would fall to about 47 dollars in 2014.

But prices would then rise to 54 dollars a barrel in 2025 and 57 dollars in 2030, the EIA said in its Annual Energy Outlook 2006.

World oil prices rose to the highest levels for more than a month last week as snow storms gripped the US northeast, increasing the likelihood of higher fuel demand for the energy- hungry region.

Source: Xinhua News Agency - CEIS

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