Friday, December 21, 2007

Oil Gyrates on Weather, Supplies

By JOHN WILEN – 14 hours ago

NEW YORK (AP) — Oil prices fluctuated Thursday as traders weighed forecasts for a warmer winter — which could lower demand for heating and crude oil — against data suggesting supplies are falling.

Natural gas futures fell after the government reported that inventories declined less than expected last week.

The National Oceanic and Atmospheric Administration said Thursday that the beginning of winter will be warmer than normal in the eastern two-thirds of the nation, which includes the heating oil-dependent Northeast, Dow Jones Newswires reported.

Warmer weather could mean lower demand for heating oil and natural gas.

On the other hand, the government on Wednesday reported that supplies of heating and crude oil fell sharply last week. Heating oil supplies are nearly 30 percent below five-year average levels, said James Cordier, president of Liberty Trading Group in Tampa, Fla.

NVDL: Right now the US is experiencing a very cold winter, with plenty of harsh ice storms. This impacts on the demand for heating oil. In the past 2-3 years the US was lucky to experience the opposite - unsually warm winters.

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