Oil Steady Over $63

Oil prices held above $63 on Wednesday ahead of data expected to show a fall in U.S. crude stocks, adding to perception that high inventory levels that hit prices in the third quarter have been reversed.

Delays to U.S. oil imports due to dense fog along the Gulf of Mexico coast forced refiners to draw on inventories last week. The fog disruptions exacerbated an overall tightening inventory picture.

Tempering gains, mild weather was expected to last in most of the United States until at least early January, continuing a warm spell that has cut into heating demand.

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.

Oil Prices Rise

Oil and gas prices rose Thursday after U.S. government data showed that domestic inventories of crude oil, gasoline and heating oil fell last week.

Also gas prices was the uncertainty ahead of a meeting next week of oil ministers from the Organization of Petroleum Exporting Countries (OPEC).
OPEC officials have been pressing in recent days for a cut in output on top of a production cut of 1.2 million barrels a day, approved in October.

Light, sweet crude for January delivery rose 21 cents to $62.40 a barrel . January Brent crude rose 30 cents to $63.37 a barrel.

The data comes amid expectations of milder temperatures in the United States and Canada. Temperatures in the Northeast, the nation's largest heating oil market, were expected to moderate later in the week, with the National Weather Service forecasting above-normal temperatures through most of the nation next week.

Oil Prices Were Little Changed

Oil prices were little changed Wednesday, Dec 6, 2006, ahead of the release of weekly U.S. petroleum inventory data, which is expected to show higher supplies.

But the possibility of more production cuts by the Organization of Petroleum Exporting Countries (OPEC) kept a floor under prices, as recent comments from key members of the cartel suggest it will push for another cut when it meets Dec 14, 2006 in Nigeria. OPEC says it is concerned about ballooning worldwide crude oil inventories.

Crude oil prices fell 1 cent to $63.31 a barrel.

Oil Prices Hover Around $62

Oil prices rose slightly in Tuesday as traders in Asia watched U.S. winter weather and anticipated further production cuts by OPEC.

Prices in the last week broke out of the $57 to $62 a barrel band that had held them for nearly two months. On Tuesday, light sweet crude for January delivery was up 16 cents midmorning to $62.60 a barrel in Asian electronic trading on the New York Mercantile Exchange.

The market would strengthen further as demand increased during the northern hemisphere winter. $60 a barrel was the new price floor.

In the short-term future, what's still going to move the market is the weather. Prices dropped a day before on a mild weather forecast for next week, but the winter season — when demand is typically highest — has not officially begun.

What drives oil at the end of the day is good old-fashioned demand.

Cold weather spurs demand for heating oil, pushing prices higher.

Prices were driven above $62 a barrel after a storm in the United States last week and comments from key members of the Organization of Petroleum Exporting Countries that suggest the cartel will push for further cuts in output when it meets Dec. 14 in Nigeria.

Oil Settles Above $63

Oil prices finished above $63 a barrel on Friday (Dec 1, 2006), ending a bullish week as traders bet on blustery weather moving across the country and more production cuts from OPEC.

Prices ended higher for the same reasons we've been talking about all week — colder weather, output cuts and a report showing U.S. inventory falling pretty steadily for the past few weeks. The market continued to hold on and closed out on a positive note.

OPEC is likely to trim production again and he expects a cut of at least 500,000 barrels a day.

OPEC could cut production by half a million barrels a day when it meets Dec. 14, 2006 in Abuja.

Natutal gas settled at $8.422 per 1,000 cubic feet, down 42.2 cents. Prices were weighed down by the Institute of Supply Management‘s report showing that the U.S. manufacturing sector contracted in November,the first time the sector contracted since April 2003.