Oil Prices Firm, but Remain Somewhat Low
Posted on: Wednesday, 28 December 2005, 12:00 CST
LONDON - Crude futures firmed Wednesday after Iran's oil minister said OPEC should consider cutting production next month, but oil prices remained well below record levels - and natural gas futures declined - amid forecasts of mild winter weather in the United States.
Light sweet crude for February delivery climbed 94 cents to $59.10 a barrel in afternoon trade on the New York Mercantile Exchange, where gasoline futures rose 5.16 cents to $1.565 per gallon.
Natural gas futures slid for the fourth straight day amid forecasts calling for mild weather in much of the U.S. and heating oil futures rose slightly.
Natural gas for January delivery fell 22.2 cents to $10.80 per 1,000 cubic feet. Natural gas is now at a three and a half month low after a four-day slide of almost 25 percent.
Heating oil futures declined by 1.8 cent to $1.655 per gallon.
The Iranian oil minister said in remarks published by the Sharq Newspaper that the Organization of Petroleum Exporting Countries should consider cutting production by one million barrels a day when it next meets Jan. 31. Kazem Vaziri Hamaneh wasn't specific on whether the reduction should be made in the cartel's actual production or its output ceiling, which is currently set at 28 million barrels per day.
"It can be said that under the present conditions the supply of oil is more than its demand", he said.
Brent crude was up 41 cents on the ICE Futures exchange, selling for $56.70 a barrel.
Analysts said sustained price gains were unlikely with weather forecasters calling for higher than normal temperatures over the next week.
According to Accuweather.com, temperatures in most of the United States apart from the Northwest will be higher than normal in the next six to 10 days.
Crude futures have been reacting to fluctuations in Northern Hemisphere temperatures, especially in the U.S. Northeast, the world's biggest heating oil market.
The price of crude is about 18 percent below its high of $70.85 on Aug. 30 after Hurricane Katrina made landfall.
Source: Associated Press/AP Online
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