Oil falls from 8-wk high on mild weather forecast in US

Jan 25 | Updated: Jan 26 2005, 05:30am hrs
Crude oil fell from an eight-week high in London on forecasts that milder weather will return to the US Northeast, curbing heating demand.

Temperatures in the northern US will be above normal in the three months beginning in February, the forecaster WSI Corp said. The Organization of Petroleum Exporting Countries was urged today by the Kuwaiti oil minister to keep its output quotas unchanged at its January 30 meeting, Agence France-Presse reported.

The market has the feeling that the worst is over about weather, said Rob Laughlin, a director at GNI Ltd, a London futures brokerage. Forecasts are for a mild February, and Opec isnt likely to give us more barrels or take them away.

Brent crude for March settlement fell as much as 0.8% to $45.63 a barrel and was down 22 cents at $45.79 at 10:09 a.m. on Londons International Petroleum Exchange. Crude for March delivery fell 22 cents to $48.59 on the New York Mercantile Exchange, down 13% from its October record of more than $55 a barrel and up 39% from a year ago.

The National Weather Service forecasts above-average temperatures in most of the US Northeast for January 30 through February 3. The region accounts for about 80% of the nations consumption of heating oil. Opec, the source of more than a third of the worlds oil, meets in Vienna on January 30 to discuss production quotas and prices.

The group reduced its output target to 27 million barrels a day as of this month in a meeting in December.