Friday January 05, 2007

Oil hits 19-month low

forbes.com :

Oil prices were at their lowest levels since mid-2005 in Asian trading hours as the market reacted to high stockpiles in the US and unusually warm winter weather there. At 10.32 am here (0232 GMT), the New York Mercantile Exchange's main contract, light sweet crude for delivery in February, was down US$0.14 at US$55.45 a barrel from US$55.59 in late trading in the US overnight. The contract had not fallen as low in Asia since June 2005, when it was below US$54.00.

Crude prices have tumbled this year as unseasonably warm weather curbs demand for heating oil in the northeast of the US, the world's biggest energy consumer. 'The market is also reacting to the bearish US inventory data showing a rise in distillates and oil reserves,' said Victor Shum, senior principal at Purvin and Gertz.

The slump in prices has continued since the end of last year despite efforts by OPEC to cut production and lift prices. The US National Weather Service has said demand for heating oil will be about 33% below normal this week. Shum said that with crude oil prices dipping by 9-10% in just 2-3 days, investors had been pulling out of the commodities markets.

See also :

1. OPEC to consider second production cut
2. OPEC cuts 1 million barrels in 1st reduction since 2004
3. Oil price very low, action needed: OPEC chief

(2007-01-05 18:01:21 SGT) [Energy] Permalink

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