LONDON, Nov 29: Oil prices dipped on Tuesday owing to warmer temperatures in the US northeast region, the world’s biggest consumer of heating fuel, analysts said.
New York’s main contract, light sweet crude for delivery in January, lost 11 cents to $57.25 per barrel in pit trading. The contract had closed $1.35 lower at $57.36 per barrel on Monday.
In London, the price of Brent North Sea crude for January delivery shed 12 cents to $54.76 per barrel in electronic dealing.
“The market remains led by the prospect of warmer-than-normal weather in the US dampening heating oil demand,” analysts at the Sucden brokerage firm said.
The US northeast accounts for 80 per cent of US demand for heating fuel.
According to the US National Weather Service demand for heating oil nationwide was expected to be about 20 per cent below normal this week owing to warmer temperatures.
“Inventories are currently running at above year-ago levels, which is adding to pressure in the market,” Sucden said.
Its analysts noted that US crude stocks were 34.2 million barrels higher than at the same time in 2004 — a figure that was “well above” the average for this time of year.
Distillate stocks, which includes heating fuel, were meanwhile 3.4 million barrels higher than a year ago. Taken alone, heating oil stocks were up by 5.0 million barrels.
Oil prices have been falling since last week, when markets deemed there to be adequate supplies of heating fuel during the northern hemisphere winter.—AFP
