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Oil Prices Slip at End of Volatile Week
POSTED: 10:42 p.m. EDT, February 18,2007

World oil prices have fallen on expected warmer weather in the United States, which would weaken demand for heating fuel.

In London, the price of Brent North Sea crude for April delivery dropped 41 cents to 57.19 dollars per barrel in electronic trading.

New York's main oil futures contract, light sweet crude for delivery in March, lost 34 cents to 57.65 dollars per barrel in electronic deals before the official opening of the US market.

"Crude futures were a little lower as the market continued to be weighed upon by forecasts of milder weather in the US towards the end of next week," Sucden analyst Michael Davies said.

"The US Northeast is currently in the grip of a cold snap, but now there are predictions that once that weather clears, it could stay mild until March."

Davies added: "In the near term, prices look set to remain under pressure as winter draws to an end, while stock levels remain comfortable as we head into the traditionally lower demand second quarter."

World oil prices had finished mixed on Thursday, with Brent crude falling briefly below 57 dollars per barrel in London as traders continued to focus on the buoyant state of US energy stockpiles.

It has been a volatile week for oil prices, beginning with a slump of more than two dollars on Monday in response to Saudi Arabian comments that appeared to pour cold water on further output cuts by the OPEC cartel.

On Tuesday, prices staged a strong rebound after the International Energy Agency (IEA) raised its estimate for world oil demand this year, closing up more than a dollar in New York.

Then on Wednesday they tumbled again following a smaller-than-expected decline in stockpiles of US distillates.

Reserves of distillates, including heating fuel, fell by three million barrels to 133.3 million in the week ending February 9, according to the Department of Energy (DoE).

Analysts had expected a larger drop of four million barrels amid freezing weather in the United States, the world's biggest energy consumer.

The week saw also traders digest the latest OPEC forecast regarding oil demand growth. The oil producing cartel said it was maintaining its estimate for the growth of oil demand in 2007 at 1.5 percent, in line with its previous monthly report.

Elsewhere, a call by an extremist Al-Qaeda group for wider attacks against US oil suppliers forced Canada, Mexico and Venezuela to review security at oil installations. The market shrugged off the threat, however.

From:AFP
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