Crude Oil Futures Drop Below $58 a Barrel ($57.59/bbl)

Associated Press ^ | November 28, 2005 | GILLIAN WONG

[RWR8189]

SINGAPORE - Oil futures fell nearly a dollar, dropping below $58 a barrel, as forecasters predicted warmer weather early this week in the U.S. Northeast, the world's largest heating oil market, easing fears of a spike in fuel demand.

Light, sweet crude for January delivery slipped 86 cents to $57.85 a barrel on the New York Mercantile Exchange in electronic trading late afternoon in Singapore.

In London, January Brent crude rose 29 cents to $55.30 a barrel on the ICE Futures exchange.

"The market's reacting to forecasts that heating oil demand will be 20 percent below normal this week, giving refiners a little breathing room to boost supply ahead of winter," said commodities strategist David Thurtell of Commonwealth Bank of Australia in Sydney.

An AccuWeather.com report said that "after several days of bitterly cold conditions, the weather will make a dramatic switch to milder weather" Monday along the East Coast.

Oil prices also dipped on last week's reports of healthy supplies of crude and distillate stocks which include heating oil, diesel and jet fuel, analysts said.

The crude contract lost 13 cents to settle at $58.71 a barrel last Wednesday on a weekly Department of Energy report showing domestic crude oil inventories had grown. U.S. markets were closed the rest of the week for Thanksgiving.

Crude oil reserves expanded 0.1 percent from the week before, standing at 321.8 million barrels. Those inventories are well above the upper end of the average range for this time of year, the report said.

Distillate production overall was 0.2 percent higher last week, matching the rise in demand over the past four weeks, while heating oil stockpiles grew 2.4 percent.

Nymex heating oil Monday fell 2.92 cents to $1.6600 a gallon (3.8 liters) while gasoline inched down 1.46 cents to $1.4430 a gallon.

But experts warned oil prices could spike in the event of a cold blast in the northeastern U.S. or other major fuel consumers in the Northern Hemisphere and said the market was eyeing the weather closely. With winter weather starting to blanket the United States, demand continues to be a key focus for the oil market.

"The question is really about the weather, and how cold it will get in the U.S. Northeast," said energy analyst Victor Shum of Texas-headquartered Purvin & Gertz in Singapore. "Heating oil inventories grew but remain on the low end of the historical range."

"So you can expect any freak weather to drive the market up," Shum said.

Analysts said to expect a firm floor to be kept under prices as concerns remained over the pace of U.S. Gulf of Mexico oil and gas facilities from Hurricanes Katrina and Rita, which limited refining capacity in the region and had sparked fears of shortages this winter.

Nymex natural gas lost 16 cents to $11.460 per 1,000 cubic feet.

[RWR8189]

Light, Sweet Crude Oil

11/28/2005 Session Contract Detail for Jan 6

	Last				57.59
	Open High				58.11
	Open Low				58.11
	High				58.30
	Low				57.41
	Settle				58.71
	Change				-1.12
	Open Interest				284128
	Volume				0.00
	Last Updated				11/28/2005 05:50:43

Unleaded Gasoline

11/28/2005 Session Contract Detail for Dec 5

	Last				1.4370
	Open High				1.4505
	Open Low				1.4505
	High				1.4505
	Low				1.4370
	Settle				1.4576
	Change				-.0206
	Open Interest				21520
	Volume				0.00
	Last Updated				11/28/2005 05:31:30

Heating Oil

11/28/2005 Session Contract Detail for Dec 5

	Last				1.6550
	Open High				1.6800
	Open Low				1.6800
	High				1.6805
	Low				1.6500
	Settle				1.6892
	Change				-.0342
	Open Interest				20962
	Volume				0.00
	Last Updated				11/28/2005 05:51:24

Natural Gas

11/28/2005 Session Contract Detail for Dec 5

	Last				11.475
	Open High				11.730
	Open Low				11.730
	High				11.735
	Low				11.420
	Settle				11.620
	Change				-.145
	Open Interest				20487
	Volume				0.00
	Last Updated				11/28/2005 05:45:25

[john_baldacci_is_a_commie]

Great, now how come I'm still paying almost 3 dollars a gallon for diesel fuel? Lousy stinkin politicians and oil barons. Glad I burn wood, screw the oil barrons the politicians and their arab masters.

Now you know why the stinkin politicains, like snowe, colllins and baldacci, never come into the woods to solicite our votes.

[Flavius]

yeah ok, wait for first snow in NE...

[The_Victor]

We're DOOMED, and it's all Bush's fault.

[Obadiah]

Ya know, it's great and all that prices are declining, but I'm bothered by this whole idea that the future of millions of consumers seems to be in the hands of a few freaky chain-smoking commodity oil traders frightened by the latest report from the Weather Channel. Uh, oh, a cold blast on Tuesday! Oil goes up $2.00. Warmer Saturday? Whew! Oil drops $0.50. Sheesh, don't sneeze anyone.

[Ramcat]

Nymex natural gas lost 16 cents to $11.460 per 1,000 cubic feet.

Let me see if I get how this works?

It's warm now and I'm not running my furnace (natural gas) and the price is low.

When it gets cold and I run my furnace, gas will be high?

Brilliant!

[Eric in the Ozarks]

I think you may be on to something.

[AxelPaulsenJr]

.........in the hands of a few freaky chain-smoking commodity oil traders frightened by the latest report from the Weather Channel.

They wouldn't have the power to effect the market like they do if the dims would let this nation develop a responsible, workable energy policy.