World
 
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Oil prices rise on US cold snap fears
AFP
NEW YORK
Petroleumworld.com 10 25 06
World oil prices rebounded slightly Tuesday on concerns that cold weather in the United States would increase demand for heating fuel, traders said.
Prices rose despite Norway's leading oil company Statoil saying it was ready to resume production at its Snorre A platform in the North Sea after a 10-day halt due to safety problems, and concerns that the OPEC oil-producing cartel may fail to cut output as promised.
New York's main contract, light sweet crude for delivery in December, closed up 54 cents at 59.35 dollars per barrel.
In London, Brent North Sea crude for December delivery settled up 65 cents at 59.86 dollars per barrel.
Northeastern parts of the United States are experiencing colder than normal temperatures heading into the northern hemisphere winter, with the state of New York already having snow.
The US northeast, the world's biggest consumer of heating fuel, is expected to see temperatures of between five and 15 degrees Celsius below the seasonal average until at least the start of November, according to The Weather Channel.
Demand for US heating fuel was set to jump by 15 percent above the seasonal average next week, according to Weather Derivatives.
Traders were meanwhile gearing up for Wednesday's market update on the state of energy stockpiles in the United States, which is the world's biggest consumer of energy.
The market was also awaiting evidence from the Organization of the Petroleum Exporting Countries that the cartel would agree, as promised, to cut output by 1.2 million barrels per day from November 1.
Saudi Arabia, which is to shoulder nearly a third of the output cuts, has told its Asian customers it will slash their November deliveries by eight percent.
However, OPEC members Nigeria and Venezuela have yet to inform customers regarding the exact volume of their revised deliveries, raising market doubts about whether the cartel is united.
"It's a problem of credibility for OPEC," said Steve Rowles, an analyst for CFC Seymour in Hong Kong.
"Can they prevent the slide in prices by not being united?"
OPEC, which produces just over one third of the world's oil, last week decided to cut its output in a bid to support crude futures, which have sunk by more than 25 percent from record highs above 78 dollars struck in July and August.
They have tumbled owing to buoyant US energy inventories, a largely uneventful Atlantic hurricane season and amid concerns that slowing US economic growth could dent oil demand.
AFP 24 2000 GMT 10 06
Copyright ©2006 AFP. All Rights Reserved.
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