NEW YORK (Dow Jones Newswires)
Crude oil futures fell Monday to their lowest settlement in nearly two weeks as forecasts for warm December weather damped demand expectations and more doubt arose over whether OPEC will cut extra production.
Heating oil led prices lower, with crude also weighed down as members of the Organization of Petroleum Exporting Countries gave mixed signals on whether a further reduction in output is likely at the group's Thursday meeting in Abuja, Nigeria.
OPEC acting Secretary-General Mohammed Barkindo said it is too early to start talking about cuts and that more data needs to be analyzed.
The front-month January light, sweet crude contract on the New York Mercantile Exchange fell 81 cents, or 1.3%, to $61.22 a barrel, its lowest settlement since Nov. 28. Brent crude on the ICE futures exchange fell 36 cents to $61.84 a barrel.
"You could blame the fall on the warmer weather, with heating oil down, or you could point to Barkindo's comments," said Phil Flynn, an analyst and trader at Alaron Trading Corp. in Chicago. "But it was fairly lackluster trading and the market is really waiting for more news before Thursday's OPEC meeting."
OPEC members are divided on the need for a further oil output cut, the group's research director, Hassan Qabazard, said Monday.
"Some member countries believe it's necessary to make a further cut, others do not," Qabazard said, without elaborating on which members favor an additional cut to the 1.2 million barrel-a-day reduction agreed to at OPEC's October meeting.
January heating oil fell 3.3 cents, or 1.9%, to $1.7243 a gallon. Front-month reformulated gasoline blendstock for oxygen blending, or RBOB, fell 2.13 cents, or 1.3%, to $1.5958 a gallon and unleaded gasoline was down 2.25 cents at $1.5988 a gallon.
The National Weather Service is predicting warmer-than-average temperatures for the U.S. Northeast, which is responsible for most of the country's heating oil demand, between Dec. 17 and Dec. 25.
"The mild temperatures dominating the weather maps for the next few weeks are putting pressure on prices ... with ongoing talk that OPEC may postpone further action on trimming production also bringing some pressure to bear," said Tim Evans, an analyst at Citigroup in New York.
Italian oil giant Eni SpA also said Monday that it lifted force majeure on 60,000 barrels a day of Nigerian oil flow that had been cut for two weeks by militant attacks. The company said it expects to see full capacity flow in "the next day or so". The attack on the flow station had supported oil prices.
Copyright (c) 2006 Dow Jones & Company, Inc.
Most Popular Articles
From the Career Center
Jobs that may interest you