Oil prices steadied on Monday, after sharp losses late last week as forecasts for warmer weather in the United States.

Oil prices steadied on Monday, after sharp losses late last week as forecasts for warmer weather in the United States and high crude stockpiles in the world’s biggest energy consumer piled pressure on the market.

U.S. January light crude was six cents up at $ 58.12 a barrel by 0335 GMT, after slumping $ 1.93 on Friday. London February Brent crude edged one cent lower to $ 57.12 a barrel, after losing $ 2.27 on Friday.

‘The weather and the high crude inventory levels are the main factors weighing down prices. This trend should carry on until the end of the year, with prices to hold between $55-$58,’ said Tetsu Emori, Mitsui Bussan Futures’ chief commodities strategist.

U.S. prices had risen to a one-month peak of $ 61.90 earlier last week following a bout of colder weather in the U.S. Northeast, the world’s biggest heating oil market.

But the U.S. National Weather Service has predicted much of the country would experience warmer-than-normal temperatures from January to March, easing concerns over winter demand.

The country’s crude oil stockpile also looks comfortable, around 13 percent above last year’s levels, according to a U.S. government report last week.

Producers cartel OPEC agreed at a meeting last Monday to keep official output quotas unchanged for now.

The cartel has been pumping flat-out in an effort to hold down soaring prices that hit an all-time high of near $ 71 a barrel in the wake of Hurricane Katrina’s devastating swathe of destruction across the U.S. Gulf Coast.

However, ahead of an expected seasonal lull in demand in the second quarter, OPEC called for an extraordinary meeting at the end of January when ministers said they would cut output if deemed necessary.

‘OPEC’s move to possibly cut supplies would be of medium to long-term impact as the effect, if any, will only be felt in the second quarter,’ Emori said.

OPEC projected demand for its oil in 2006 will rise to 28.7 million barrels per day (bpd), up 134,000 bpd from its previous forecast and above its current output ceiling of 28 million bpd for the 10 members with quotas, not including non-quota Iraq.

Source : today.reuters.com