  |
|
Oil prices plummet on balmy winter temperatures
AFP
NEW YORK
Petroleumworld.com 01 10 07Global oil prices plunged to their lowest depths in over 19 months Tuesday as unsually warm weather in the northern hemisphere highlighted the likelihood of weak demand for heating fuel.
Prices also fell despite the ongoing disruption of Russian oil exports to Europe.
New York's main contract, light sweet crude for delivery in February, closed down 45 cents at 55.64 dollars per barrel.
The contract had earlier, however, fallen as low as 53.88 dollars, the lowest point since June 2005.
Brent North Sea crude for February delivery settled down 42 cents at 55.18 dollars per barrel, after earlier slumping to 53.64 dollars, the lowest point since mid-June 2005.
"When you can wear a T-shirt in New York in January and across the east, the demand for heating fuel isn't going to be there," said Bart Melek, an analyst at BMO Capital Markets.
"At the same time, the US economy seems to be bottoming, functioning below potential," Melek said.Crude futures prices have slumped by almost 12 percent since the start of 2007 on falling demand for heating fuel, particularly in the United States but also in Europe.
And the balmy winter temperatures look set to continue in coming days as weather forecasters are predicting warmer-than-normal temperatures across the northeastern United States over the next ten days.
Meanwhile, Russian Energy Minister Viktor Khristenko on Tuesday confirmed that Moscow had cut off oil supplies through the key Druzhba transit pipeline to Belarus and European markets.
Belarussian officials arrived in Moscow for talks Tuesday after a cut in oil supplies from Russia through the pipeline.
German Chancellor Angela Merkel told reporters in Berlin that Moscow's sudden suspension of oil deliveries westwards through the Druzhba pipeline had diminished confidence in Russia as an energy supplier.
"It is not acceptable when there are no consultations about such moves," Merkel said when asked about Russia's reliability as an energy partner.
Belarus wants Russia to pay a 45-dollar-per-tonne fee for oil transiting through the pipeline across its territory, but Moscow says the fee is illegal. Both countries accuse each other of provoking the halt in supplies.
About 12.5 percent of the oil the EU consumes is pumped through the pipeline from Russia, which provides roughly half of the 27-nation bloc's oil imports.
Analysts said there is little immediate threat of oil shortages across Western Europe, however, because oil refiners are relatively well supplied and alternative supply sources are available in the short term.
AFP 09 2031 GMT 01 07
Copyright© 2001 AFP.All Rights Reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels