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Oil prices resume downward fall
AFP
NEW YORK
Petroleumworld.com 01 09 07World oil prices swung lower Monday, hitting their lowest levels in over a year, amid mild winter temperatures in the United States expected to reduce energy demand.
New York's main contract, light sweet crude for delivery in February, closed down 22 cents at 56.31 dollars per barrel compared with Friday's close.
In London, the price of Brent North Sea crude for February delivery settled down a slight four cents at 55.60 dollars per barrel.
The London contract, however, had plunged as low as 54.41 dollars per barrel in earlier trading, a depth not seen since November 30, 2005.
Crude futures had also slumped last week owing to falling US demand for heating fuel, which has been dented in recent weeks by unusually warm winter weather along the US east coast.
Some traders said the market has been dismissive of cold weather forecasts because of ample supplies.
"The fundamenatals that forced prices lower in the first place are still here: mild weather and a relative quiet on the geopolitical front," said Mike Fitzpatrick, an analyst at FIMAT USA.
"There is enough supply. People are not really worried about colder weather," Fitzpatrick said.
Unusually warm temperatures in the US northeast region -- the biggest market for heating fuel -- had driven oil futures down about 8.0 percent last week, compared with the final week of 2006.
Analysts, however, said oil prices might gain some support on news that Russia's oil exports to Europe have been disrupted.
Russian oil exports to Germany and Poland through Belarus were cut Monday in a dispute spotlighting the European Union's (EU) vulnerability to tension between Russia and its ex-Soviet neighbours.
Belarussian state television quoted sources at Gomeltransneft Druzhba, which operates the key Druzhba oil transit pipeline, confirming statements from Germany and Poland that transfers of Russian oil had halted.
Moscow said Belarus provoked the disruption by illegally siphoning off Russian oil, but authorities in the ex-Soviet republic said oil was taken as a form of transit payment imposed on January 1 because Moscow had refused to pay.
Belarus foreign ministry said officials were flying to Moscow on Monday for emergency talks.
The development comes amid a row between Minsk and Moscow over Russian crude shipments which are pumped through Belarus to customers and refiners in the European Union.
Separately, Nigeria's government said it had lost about 570 billion naira (around 4.4 billion dollars, 3.5 billion euros) in revenue last year due to falling oil production caused by unrest in the southern Niger Delta.
AFP 08 2058 GMT 01 07
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