Oil Prices Fall but Gas, Heating Oil Rise

By GEORGE JAHN

VIENNA, Austria – Crude-oil prices eased Tuesday, but gasoline and heating oil rose because of possible refinery problems in the United States. A widely anticipated forecast, meanwhile, predicted that pricey crude would cut world demand growth this year.

Revised demand figures published by the International Energy Agency were down 16 percent compared with its figures a month ago. The IEA, which acts as the energy watchdog for the Organization for Economic Cooperation and Development countries, said there would be additional demand of 1.49 million barrels a day. That was down from forecasts of 1.78 million a month ago.

High oil product prices are clearly having an impact on demand, most notably in Southeast Asia, which had been a key driver of global oil demand growth, the report said.

Light, sweet crude for April delivery fell 19 cents by midday in Europe to $61.58 a barrel in electronic trading on the New York Mercantile Exchange. April Brent crude futures on the ICE Futures exchange fell 23 cents to $61.97 a barrel

Gasoline futures rose more than 2 cents to $1.7654 a gallon while heating oil gained just more than a cent to $1.7654 a gallon.

The market was also awaiting the weekly inventory snapshot produced by the U.S. Department of Energy’s statistical arm, the Energy Information Administration.

Vienna’s PVM Oil Associates forecast that gasoline stocks would fall by 1.3 million barrels due to declining imports, distillate stocks would decline by 1.6 barrels and crude would rise by 2.3 million barrels in the report to be released Wednesday.

Nymex oil prices had surged $1.81 on Monday to settle at $61.77 on nagging concerns about unrest in Nigeria and the possibility of U.N. sanctions against Iran, the No. 2 producer within OPEC, for its nuclear ambitions.

In Nigeria, recent attacks by militants on pipelines and oil facilities have left the country’s production down by about 400,000 barrels a day.

“We would expect the potential for further chaos in Nigeria to provide a floor for prices around $60 a barrel, and we expect Nigeria will continue to be a major issue in terms of supply security up to, and probably beyond, next year’s elections,” wrote Barclays Capital’s analysts in a research note.

U.S. oil products prices rose on talk of continuing restart problems at BP PLC’s Carson, Calif., refinery and ongoing problems at Valero Energy Corp.’s Benicia refinery. This could prompt U.S.-based refiners to seek more gasoline from fellow refiners and probably increase purchasing from Northwest Europe.