SINGAPORE: Oil futures declined Thursday following the release of a U.S. weekly petroleum supply snapshot showing crude and gasoline stocks rose, and as warmer-than-usual weather in the U.S. offset a drop in distillate stocks, which include heating oil.
In its weekly supply report, the federal Energy Information Administration said crude-oil inventories rose 4.5 million barrels to 323.6 million barrels in the week ended Nov. 4 from a week earlier.
Crude stocks are about 13 percent higher than they were a year ago.
Midmorning in Singapore, light, sweet crude for December delivery fell 40 cents to US$58.53 a barrel in Asian electronic trading on the New York Mercantile Exchange.
The contract Wednesday declined by 78 cents to settle at US$58.93 a barrel - the lowest close since US$58.65 on July 22.
Gasoline slipped 0.93 cents to US$1.5420 a gallon (3.8 liters) while heating oil fell 0.81 cents to US$1.7815.
Analysts said the downward adjustment in energy futures was supported by milder-than-normal weather in the U.S. Northeast and Midwest, although meteorologists warned that temperatures could plunge once winter does arrive.
"Sooner or later it's going to turn much colder in the U.S. and there'll be a shift of focus to heating oil supplies, which have been declining for seven straight weeks,'' said energy analyst Victor Shum of Purvin & Gertz in Singapore.
"That will cause a rally.''
John Kocet, senior meteorologist with Accuweather.com, said there was a reservoir of cold air covering most of northern Canada, but that it had been farther north than usual for the past several weeks.
"The problem is the longer the arctic air sits up north, the colder it gets, and when it finally comes down, we are going to be in for a real shock,'' Kocet said.
U.S. inventories of distillate fuel, which includes diesel and heating oil, slipped by 100,000 barrels to 120.8 million barrels.
They are 2 percent higher than a year ago, but in the lower half of the average range for this time of year.
Gasoline inventories rose by 4.2 million barrels to 201.1 million barrels - nearly 2 percent lower than year-ago levels, but now in the upper half of the average range for this time of year.
Some experts have also said the market's wariness of unexpected cold snaps in the U.S. kept a firm floor under prices, with many predicting crude futures would trade in the range of US$58-62 a barrel in the near term.
"The market will really keep an eye on the weather. Traders are reluctant to get too short when winter arrives, and that's providing a strong psychological support for prices,'' Purvin & Gertz's Shum said.
Short positions are bets that prices will fall.
Nymex December natural gas declined 7.4 cents to US$11.595 per 1,000 cubic feet. - AP