VOG 2005 New Thread

AP
Crude Oil Prices Fall Slightly
Friday December 23, 3:21 am ET
By En-Lai Yeoh, Associated Press Writer
Quiet Crude Oil Market, Prices Drift Lower Ahead of Christmas Weekend

SINGAPORE (AP) -- Crude oil prices fell slightly Friday in subdued trading ahead of the Christmas holidays and due to expectations of milder winter weather in the eastern U.S. for the next few days.

On the New York Mercantile Exchange, February light, sweet crude inched down 13 cents to $58.15 a barrel in electronic trading. The contract had fallen 28 cents to settle at $58.28 a barrel.

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Brent crude futures for February delivery on London's ICE exchange were also lower, falling 5 cents to $56.50 a barrel.

Oil prices had fallen overnight after selloffs in natural gas on the Nymex, where the key heating fuel had fallen $1.348 to close at $12.923 per 1,000 cubic feet.

In Asia Friday, natural gas was down 24.3 cents to $12.680, heating oil fell marginally to $1.7365 a gallon while gasoline was nearly flat at $1.5410 a gallon.

The drop in natural gas was triggered by a smaller-than-expected decline in commercially held inventories in the United States Thursday -- and reports of milder winter weather for the extended Christmas weekend in the United States, the world's largest energy consumer.

Warmer temperatures mean less heating fuel consumption, and less demand. With around 80 percent of U.S. heating fuel consumption in the northeastern arc of the country, global energy markets closely watch thermometers to gauge supply and demand.

"For the first time in more than two weeks there won't be a big storm to end the workweek," said respected forecasters AccuWeather on its Web site. "After enduring bitterly cold weather for much of the month of December, folks east of the Rockies are going to be getting an early Christmas present in the form of a winter thaw."

Elsewhere, a Royal Dutch Shell pipeline in Nigeria that was damaged in a blast earlier this week was ready to receive crude, with clean-up exercises to begin later Friday, Dow Jones Newswires reported.

News of the blast in Africa's largest producer had momentarily lifted prices when oil flow of up to 180,000 barrels per day was halted.

Unrest, political uncertainties and crude flow stoppages in Nigeria and other key producers were partly blamed for the price spike that began in 2004, when analysts said any disruption to exports could eat into the world's thin buffer of spare crude