LONDON, Nov 25: Oil prices fell on Friday, with supplies of heating fuel deemed adequate to meet demand during the northern hemisphere winter despite the onset of freezing weather in the region.

In London, the price of Brent North Sea crude for January delivery fell 14 cents to $55.16 per barrel in electronic dealing.

On Wednesday, New York’s main contract, light sweet crude for delivery in January, had closed down 13 cents at $58.71 per barrel.

US traders were away from their desks until Monday owing to the Thanksgiving long holiday weekend across the Atlantic.

“Brent crude futures fell almost a dollar on Thursday in thin trade in a continuation of the selling from Wednesday after US data showed a larger than expected rise in distillate stocks, easing concern about supplies for the winter season,” analysts at the Sucden brokerage firm said.

The higher inventory levels suggest that US oil companies have been able to rebuild their stocks thanks to milder weather, after their operations were battered by hurricanes in August and September.

Stockpiles of crude oil rose by 400,000 barrels for the week ending on November 18 to total 321.8 million, the US Department of Energy had said on Wednesday.

That was in line with analysts’ forecasts.

Motor gasoline, or petrol, stocks rose 200,000 barrels to total 200.4 million barrels — much less than expected.

Inventories of distillate supplies, which are used to make heating oil and diesel fuel, rose for a second straight week by 1.1 million barrels to 124.5 million, nearly double the amount forecast.

Despite rising inventories, concern over colder temperatures in the United States were lending support to oil prices on Friday.

“The colder weather in the US northeast, the worlds biggest heating oil market which accounts for 80 percent of the demand for heating oil in the US, is supporting the market, along with colder weather in Europe,” Sucden analysts said.

“However the US northeast longer term forecast is for warmer than average temperatures next week, which should pressure the markets further,” they added.

After hitting a record high point in New York of $70.85 a barrel on August 30, oil prices have been falling to reflect unusually mild weather during October and much of November.

They hit a five-month low of $56.34 last week.—AFP