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Oil Prices Engulf This Year's Gains on IEA Report

Posted on: Saturday, 11 February 2006, 09:00 CST

Oil prices engulf this year's gains on IEA report NEW YORK, Feb. 10 (Xinhua) -- World crude oil prices plummeted to their lowest levels this year Friday, after the International Energy Agency downgraded the world demand forecast.

New York's main contract, light sweet crude for delivery in March, lost 78 cents to close at 61.84 dollars per barrel.

In London, the price of Brent North Sea crude for March delivery fell 1.11 dollars to end at 59.64 dollars per barrel.

On the New York Mercantile Exchange,the March heating oil slid 2.21 cents to close at 1.6426 dollars a gallon, while March gasoline lost 5.22 cents to settle at 1.4621 dollars a gallon. Natural gas fell 16.3 cents to 7.316 dollars per 1,000 cubic feet.

On Friday, the Paris-based International Energy Agency predicted worldwide demand for oil in 2006 would increase by 1.78 million barrels a day instead of its previous projection of 1.83 million.

It pinned the big year-end demand drop on high energy prices, mild U.S. weather that cut heating demand, and market disruptions stemming from hurricanes Katrina and Rita in the United States.

Crude futures prices gained almost nine percent in January and hit 69.20 dollars in New York on January 23 but have since declined on rising US energy inventories and milder than expected weather in the northern hemisphere winter. U.S. National Climatic Data Center said last month was America's warmest January on record.

Cold weather is expected to return to the Northeast, the nation 's largest market for heating fuels, this weekend. Below-normal temperatures are projected across the western, central and northeastern U.S. from Feb. 14 to 18, according to the U.S. Climate Prediction Center.

U.S. gasoline inventories jumped 4.3 million barrels, more than double analysts' consensus forecasts of a 1.6-million-barrel build, to 223.3 million in the week to February 3. U.S. crude inventories remain nearly 11 percent higher than year-ago levels, and distillate inventories are 12 percent higher,according to EIA' s report released Wednesday.

Source: Xinhua News Agency - CEIS

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