23 November 2005, 15:25  Oil hovers near $59

Oil hovered close to $59 a barrel on Wednesday as cold weather across the northern hemisphere offset the impact of healthy fuel stocks. U.S. light crude (CLc1) for January traded 10 cents lower at $58.74 by 0942 GMT, easing slightly from Tuesday's gain of more than a dollar, or nearly two percent. London Brent (LCOc1) crude traded eight cents lower at $56.33. "We've been rallying on the weather and on short-covering ahead of Thanksgiving in the States," said Deborah White of SG Commodities in Paris. The U.S. market will be closed on Thursday and Friday in celebration of Thanksgiving and many traders are reluctant to head into a long weekend with short trading positions. Before the holiday, U.S. government data will be released at 1530 GMT on Wednesday. It is expected to show an 800,000 barrel increase in distillate stocks, including heating oil, which are already higher than the same time a year ago. European heating oil stocks have also swollen, with storage tank-levels at a six-year high, according to data released last week. Wednesday's U.S. data were also expected to show a modest increase of 600,000 barrels in crude stocks and a 1.1 million barrel build in gasoline. An unusually mild start to the winter has so far boosted heating oil supplies, but freezing temperatures this week have increased demand and pulled U.S. crude prices up from a five-month low of $56.80 touched on Friday. Prices remain around $12 lower than a record high of $70.85 hit at the end of August in the immediate aftermath of hurricane damage. The International Energy Agency, the West's energy watchdog, said on Tuesday prices were still too high, though they should fall as production is outstripping consumption. Ministers of the Organization of the Petroleum Exporting Countries, which has been pumping at full throttle, have said they will not consider an output cut at their meeting in Kuwait on December 12 unless prices fall sharply.

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