Warmer-than-average weather may help stem a decline in U.S. heating oil supplies, which have fallen in all but one of the past six weeks. Oil ministers from Kuwait, Nigeria and Venezuela have signaled OPEC may keep crude output at current levels.
Crude oil for March delivery fell as much as 0.7 percent to $49.31 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was down 24 cents at $49.40 a barrel at 8:50 a.m. London time, after reaching $49.75 yesterday, the highest intraday price since Nov. 30.
It looks like its going to warm up towards the latter part of the week, said Jason T. Sunderland, an independent oil trader in New York. OPEC doesnt need to cut oil output with oil prices above $49 a barrel, he said.
The Organization of Petroleum Exporting Countries meets on Jan. 30 to decide on output. Oil futures in New York have gained 22 percent to trade above $49 a barrel since the group of 11 crude producers announced on Dec. 10 a 1 million-barrel-a-day production cut effective Jan. 1.
Temperatures in the northern half of the U.S. will exceed the seasonal average from Jan. 31 through Feb. 4, the National Weather Service said in a Web site forecast issued yesterday.
Crude closed yesterday at $49.64 in New York, the highest since Nov. 29, as cold in the U.S. and fire at a ConocoPhillips refinery in Louisiana boosted heating oil and gasoline prices. The company didnt say how much the fire cut production.
Oil has gained 14 percent this year as cold in the U.S. Northeast raises demand for heating fuel. The region consumes about 80 percent of the household heating oil used in the U.S.