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Oil Falls on Forecasts for Warmer Weather in the Northern U.S.

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    Fw: [fuelcell-energy] ... Oil Falls on Forecasts for Warmer Weather in the Northern U.S. Listen Dec. 16 (Bloomberg) -- Crude oil, heating oil and natural gas
    Message 1 of 1 , Dec 16, 2005
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      ---------- Forwarded Message ----------
      Oil Falls on Forecasts for Warmer Weather in the Northern U.S.
      Dec. 16 (Bloomberg) -- Crude oil, heating oil and natural gas fell on
      forecasts showing that warmer weather will move across the northern
      U.S., reducing demand for heating fuel.

      Higher-than-normal temperatures will sweep into the Great Plains and
      parts of the Midwest by Dec. 29, according to the National Weather
      Service. U.S. supplies of crude oil, heating oil and natural gas last
      week were above the five-year average for the date, according to the
      Energy Department.

      ``It looked like we would be experiencing below-normal temperatures
      through mid-January but now it appears that the pattern will end by
      the end of the month,'' said Aaron Kildow, a broker at Prudential
      Financial Derivatives LLC in New York. ``That has taken the steam out
      of natural gas and oil as well.''

      Crude oil for January delivery fell $1.93, or 3.2 percent, to $58.06
      a barrel on the New York Mercantile Exchange, the lowest close since
      Nov. 30. It was the biggest decline since Sept. 23. Futures fell 2.2
      percent this week and are 31 percent higher than a year ago.

      Oil reached a record $70.85 a barrel on Aug. 30, the day after
      Hurricane Katrina struck the U.S. Gulf of Mexico coast. All offshore
      platforms and almost 30 percent of the country's refining capacity
      were closed when Hurricane Rita made landfall in September.

      ``For the last couple weeks we've had a block over western Canada
      which has kept warm winds from coming in off the Pacific,'' said Joel
      Burgio, a senior meteorologist for Meteorlogix LLC in Lexington,
      Massachusetts. ``Cold weather has come down from the north and this
      has spilled into the U.S.''

      Home-heating demand in the Northeast, where 80 percent of the
      nation's heating oil is used, will be 2 percent above normal through
      Dec. 23, said Weather Derivatives, a forecaster in Belton, Missouri.
      The seven-day forecast on Dec. 14 called for demand to be 14 percent
      above normal.

      Warmer Air

      ``It looks like the block is ending and warm air will soon spill into
      the northern Rockies and Plains,'' Burgio said. ``It will take longer
      for the warm weather to make it to the Midwest and Northeast. In
      about 10 days we may see above-normal temperatures throughout the

      Heating oil for January delivery fell 5.53 cents, or 3.1 percent, to
      $1.732 a gallon in New York. Heating oil reached a record $2.21 on
      Sept. 1. Futures were little changed this week and have gained 25
      percent in the past year.

      Natural gas for January delivery declined 14.8 cents, or 1.1 percent,
      to close at $13.633 per million British thermal units in New York.
      Futures touched $15.78 on Dec. 13, an all- time high. Prices, which
      are down 4.7 percent this week, are 95 percent higher than a year

      U.S. Inventories

      U.S. crude oil stockpiles rose 892,000 barrels to 321.2 million last
      week, leaving supplies 9.3 percent higher than a year earlier, the
      Energy Department reported on Dec. 14. Heating oil supplies fell
      329,000 barrels to 57.4 million last week, the report showed. The
      decline left inventories 5.3 percent higher than their five-year

      Gasoline supplies jumped 1.8 million barrels to 204.4 million barrels
      last week, leaving them 2.5 percent lower than a year earlier, the
      report showed.

      Gasoline for January delivery fell 4.79 cents, or 3 percent, to
      $1.5689 a gallon in New York, the lowest close since Dec. 7. It was
      the biggest decline since Nov. 7. Futures surged to a record $2.92 a
      gallon on Aug. 31. Prices fell 2.2 percent this week and are up 38
      percent from a year ago.

      Regular gasoline at the pump, averaged nationwide, rose 1 cent to
      $2.202 a gallon yesterday, AAA said today on its Web site. Prices are
      down 28 percent from the record $3.057 a gallon on Sept. 2, according
      to the AAA, the nation's largest motorist organization. Pump prices
      are 21 percent higher than a year earlier.

      Economic Growth

      ``With the year-on-year deficit in gasoline and with economic growth
      it is hard to be bearish about energy in the short or medium term,''
      said Jason Schenker, an economist at Wachovia Corp. in Charlotte,
      North Carolina. ``The manufacturing and retail numbers, the regional
      and national numbers, wherever you look they are positive. The same
      goes for overseas.''

      Business confidence in Germany, Europe's largest economy and the
      world's fifth-biggest oil consumer, climbed to a five- year high in
      December, suggesting economic growth will accelerate. The Ifo
      confidence index, based on a monthly survey of 7,000 executives, rose
      to 99.6 from November's 97.8.

      Economic growth in the U.S. and China, which together consume about
      34 percent of the world's oil, has pushed prices higher. The U.S.
      economy expanded at a 4.3 percent annual rate from July through
      September, the quickest pace since the first quarter of last year,
      the Commerce Department said on Nov. 30. China's economic growth has
      topped 9 percent for nine quarters.

      OPEC Forecast

      The Organization of Petroleum Exporting Countries, the source of
      about 40 percent of the world's oil, today raised its estimate of
      global demand next year and the amount its own members will need to
      pump because of accelerating economic growth.

      OPEC expects world demand in 2006 to increase 1.59 million barrels a
      day, or 1.9 percent, to 84.9 million barrels a day. The group
      forecast that demand would increase 1.8 percent a month ago.

      Brent crude oil for February delivery fell $2.27, or 3.8 percent, to
      close at $57.13 a barrel on the London-based ICE Futures exchange,
      formerly the International Petroleum Exchange. Brent surged to a
      record $68.89 on Aug. 30.

      To contact the reporter on this story:
      Mark Shenk in New York at mshenk1@....
      Last Updated: December 16, 2005 15:37 EST




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