Warm Weather Streak Caps Prices at Record Low
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Crude oil was little changed below $59 a barrel in New York after yesterday plunging the most in 20 months as mild weather curbed heating demand and traders speculated that fuel supplies increased. Home-heating demand in the Northeast, the region responsible for 80% of American heatingoil use, will be 43% below normal through January 10, forecaster Weather Derivatives said.
The Organization of Petroleum Exporting Countries, producer of 40% of the world’s oil, may find it difficult to implement an agreed output cut of 500,000 barrels a day as of February 1. The group had already agreed to cut by 1.2 million barrels a day.
“It’s inordinately warm here in the United States,” economist and editor of Virginia-based Gartman Letter, Dennis Gartman, said. “Plus you have the concerns that OPEC may not be able to monitor itself very well and adhere to its own quotas so you have the probabilities or possibilities of increased supplies and clearly reduced demand.”
Crude oil for February delivery was at $58.18 a barrel, down 14 cents, in after-hours electronic trading on the New York Mercantile Exchange at 8:20 a.m. in Singapore.
Tuesday, the contract fell $2.73, or 4.5%, to $58.32 a barrel.
