Oil prices down, $62.21 a barrel

Oil prices retreated from highs reached last week due to balmy weather, but stayed above $62 a barrel as blasts tore through two oil-company facilities in southern Nigeria.

Prices had risen steadily last week on renewed supply concerns as U.S. inventories fell and after the Organization of Petroleum Exporting Countries (OPEC) decided to cut output in February.

But mild weather in the continental U.S. and forecasts calling for more of it through the remainder of December weighed heavily on heating oil and natural gas futures, dragging crude-oil futures lower, too.

The decline was moderated by events in Nigeria, where the militant group the Movement for the Emancipation of the Niger Delta claimed responsibility for the blasts, warning before the explosions that it had planted three car bombs in the region of creeks and swamps where most of Nigeria's petroleum is pumped.

Two separate private security contractors, speaking on condition of anonymity citing prohibitions on speaking to reporters, said a blast hit an Agip residential compound in Port Harcourt and Shell oil reported an explosion at company facilities in the city where many foreign oil workers live.

Nigeria is the world's 12th largest oil producer and the fifth-largest supplier to the United States.

Some analysts have suggested the post-OPEC announcement surge could be the impetus that brings oil prices back above $70 a barrel. In mid-July, crude surpassed $78 a barrel, but then dropped back. The contract has been trading between $58 and $64 a barrel since early October.

Global crude oil inventories are still abundant, but many energy traders see any potential decline in supplies as a reason to bid up prices — especially against the backdrop of resilient consumer demand.

OPEC pledged to cut production in February by half a million barrels a day. By delaying action until 2007, OPEC left itself a window to decide against a cut, should demand spike higher due to a colder-than-expected winter or stronger-than-expected economy.

In its official statement, the cartel said it expects non-OPEC supplies to grow by 1.8 million barrels a day in 2007, the biggest one-year jump since 1984, and about 500,000 barrels per day more than anticipated global demand growth of 1.3 million barrels.

OPEC's decision followed the U.S. government's weekly report on Wednesday, which showed that inventories of crude oil, heating oil and gasoline fell last week. Crude oil inventories remain well above last year's level, but heating oil and gasoline inventories are now lower than where they were a year ago.

Oil Prices Hold Above $61 a Barrel

Oil prices held above $61 a barrel Tuesday as the market awaited OPEC's decision this week on whether to further cut production in order to shore up prices.

The market is somewhat uncertain what to expect from Thursday‘s meeting in Nigeria of the 11-member Organization of Petroleum Exporting Countries (OPEC).

It was premature to consider another production cut for OPEC.

Quebec Drivers Face Higher Pump Prices

Quebec drivers could pay more at the pump next year as they get squeezed between the provincial government's fight against climate change and the oil industry’s attempts to protect the bottom line.

Canada’s major oil companies notified the Quebec government in November that consumers will be picking up most of the tab for the province’s new environmental plan.

The Canadian Petroleum Products Institute suggested oil companies will follow the lead of hydro and gas companies by passing along costs.

The proposed law facing a vote in the legislature this week would charge oil companies 1.3 cents per litre of gas in an effort to raise money for the government's so-called green fund.

It’s simply unrealistic to expect oil companies to absorb the tax.

Greenhouse gases account for more than 80 % of emissions related to consumption.