SINGAPORE, Dec 22 - Oil prices were steady on Monday after a fall on Friday dented a rally to nine-month highs. Milder weather in the northeast United States was expected to soften demand for heating fuel but traders remained cautious on the level of winter oil stocks cover for the world's biggest oil consumer. U.S. crude oil futures were down 12 cents at $32.90 a barrel on Monday, more than $1 off Friday's highs. Brent crude in London was five cents up at $30.10 a barrel. Traders said the longer-term upward trend of the market which started in late-November remained in place, and that some of Friday's losses were a result of speculators taking profits. "It's a temporary adjustment and the market is not stuck in a downtrend," said Shun Maruyama, an oil analyst at UFJ Institute Ltd. Forecasts for a cold December in the U.S., particularly in the key Northeast heating oil market, have helped fuel the market's steady upward climb.
However, on Monday private forecaster Meteorlogix called for above-normal temperatures for the next five days in the Northeast. Tight fuel stocks and worries over crude supply levels from the Middle East kept a floor under prices. U.S. crude inventories have fallen for the last four weeks, dropping 11.6 million barrels per day below year-ago levels to the lowest point in December since the government began tracking the data in 1982. Distillates stocks, including heating oil, have dropped too, sharpening fears over fuel supplies with more U.S. cold weather forecast for the second half of this month. The market was also kept jittery by uncertainty over what OPEC may do when it next meets in February after prices have risen 25 percent since the producer cartel in September decided to cut supply by 3.5 percent. Some OPEC ministers have warned the cartel may cut supply again in February on fears of a surplus glut once demand declines after the northern winter.//