Crude Oil, Heating Oil Fall as Mild U.S. Weather Curbs Fuel Use

Crude oil and heating oil fell as higher-than-normal temperatures inthe northern U.S. reduced demand for heating fuels.

"It all comes down to the weather,'' said Bill O'Grady, an analystwith A.G. Edwards & Sons in St. Louis. ``Mild weather is keeping a lidon prices. When we finally get cold weather we may see things turnaround.''

Home-heating demand in the U.S. Northeast, where 80 percent of thenation's heating oil is consumed, will be 22 percent below normalthrough Nov. 14, said Weather Derivatives, a forecaster in Belton,Missouri. Consumption in the north-central U.S. will be 36 percentbelow normal.

Crude oil for December delivery fell 67 cents, or 1.1 percent, to$59.91 a barrel at 10:01 a.m. on the New York Mercantile Exchange.Futures have dropped 15 percent since reaching a record $70.85 on Aug.30. Prices are up 21 percent from a year ago.

Heating oil for December delivery declined 3.02 cents, or 1.7 percent,to $1.766 a gallon in New York. Futures reached a record $2.21 onSept. 1. Prices are up 29 percent from a year earlier.
``We're seeing range trading in all of the energy contracts,'' saidJason Schenker, an economist at Wachovia Corp. in Charlotte. ``The bigquestion is whether this is the bottom or if we will go lower. In theshort-term the inventory numbers and the weather will determine whatwe do.''

U.S. InventoriesU.S. crude-oil and gasoline inventories rose in the week ended Oct.28, according to the Energy Department. Supplies of distillate fuels,which include heating oil and diesel, were little changed.

The reportcovering last week is scheduled for release on Nov. 9.
Gasoline for December delivery fell 2.29 cents, or 1.4 percent, to$1.5851 a gallon in New York. Prices are down 46 percent from a record$2.92 touched on Aug. 31. Gasoline is up 24 percent from a year ago.

Regular gasoline at the pump, averaged nationwide, fell 1.5 cents to$2.383 a gallon on Nov. 4. Prices are down 22 percent from the record$3.057 a gallon on Sept. 2, according to the AAA, the nation's largestmotoring organization. Pump prices are 19 percent higher than a yearago.
Oil demand will grow about 1.4 percent a year for the next quartercentury, according to the International Energy Agency, adviser toindustrialized nations on energy policy.

To meet energy demand through 2030, investments of about $17 trillionare needed, including $3 trillion in each the oil and gas industriesand more than $10 trillion in power plants and transmission lines, theIEA said in its 2005 World Energy Outlook, published today. TheParis-based agency represents 26 oil-consuming countries.

Brent crude for December fell 65 cents, or 1.1 percent, to $58.60 abarrel on the London-based ICE Futures exchange, formerly theInternational Petroleum Exchange. Prices are down 15 percent from arecord $68.89 Aug. 30.


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