Crude oil futures fell Tuesday as unseasonably mild weather along the U.S. East Coast spurred hopes that this winter could be warmer than expected, weakening demand for heating fuel.

Crude oil futures fell Tuesday as unseasonably mild weather along the U.S. East Coast spurred hopes that this winter could be warmer than expected, weakening demand for heating fuel.

Light, sweet crude for January delivery on the New York Mercantile Exchange lost 31 cents to $ 57.05 a barrel in Asian electronic trading. The contract fell $ 1.36 to settle at $ 57.35 a barrel Monday.

In recent weeks, the market has been fixated on weather patterns in the northeastern U.S., the world’s biggest heating fuel market. Warmer weather has depressed prices, while snowstorms and concerns about a colder-than-normal winter have raised prices.

‘Nothing like a post-Thanksgiving spring storm to sink the energy complex,’ said Phil Flynn, an analyst with Alaron Trading Corp. in a research note. ‘The warmer-than-normal temperatures are raising hopes that this winter will continue on the warmer than normal side.’

Heating oil fell 0.56 cents to $ 1.6300 a gallon while gasoline inched down marginally to $ 1.4180 a gallon.

But many analysts expect the current mild weather to be short-lived. A snowstorm currently battering some western and midwest states is projected to head east and send temperatures plunging by the end of this week, according to AccuWeather.com.

‘We can expect more normal readings soon but with each day that doesn’t require heat, sellers will try to pile on,’ Flynn said.

Also weighing on prices were expectations a midweek U.S. government petroleum inventories report would show an increase in fuel supply in the week ended Nov. 25, as refinery runs rose.

Ten energy analysts surveyed by Dow Jones Newswires forecast a rise in distillate stocks of 595,000 barrels on average, while gasoline stocks were expected to climb by 755,000 barrels on average. Distillate inventories include heating oil and diesel fuel.

Refinery utilization was expected to show another significant increase, with nine of the 10 analysts projecting runs to increase anywhere from 0.25 of a percentage point to 2 percentage points above last week’s 88.1 percent of operable capacity.

Crude inventories were expected to fall about 220,000 barrels in government and industry data this week, according to the average estimate of analysts polled Monday.

Meanwhile, Saudi Arabian Oil Minister Ali Naimi on Monday said the international oil market was ‘balanced,’ and the inventories were ‘comfortable for consuming countries,’ but he would not say if the Organization of Petroleum Exporting Countries would cut production at its meeting in Kuwait City next month.

Cartel members are pumping some 30 million barrels a day, and they have a spare capacity of 2 million barrels a day.

Source : www.tahlequahdailypress.com