NEW YORK - Oil prices fell over US$1 on Friday from the previous day's US$2 rally, as a mild start to the Northern winter heating season and recovering US production buffered supplies.
US light crude oil prices settled down US$1.20 to US$60.58 a barrel while London Brent crude fell US$1.27
to US$59.25.
Prices had jumped more than US$2 a barrel on Thursday, boosted by stronger-than-anticipated US retail sales data that reinforced expectations of a rebound in sagging energy demand statistics.
"The bottom line is US demand seems to be recovering, but the market still needs to be convinced of that," said Mike Wittner, head of energy market research at Calyon.
Analysts have been concerned that reduced fuel production during peak winter demand could drive prices back up, but the mild start to winter helped push US crude futures below US$59 on Wednesday for the first time since July.
Temperatures in the US Northeast, the world's largest heating oil market, are expected to remain well above normal until at least Tuesday next week, according to private forecaster Meteorlogix.
The latest National Weather Service six- to 10-day forecast called for above-normal temperatures for the eastern two-thirds of the nation, with mostly seasonal readings expected for western states.
The mild weather has also pressured New York natural gas prices below the benchmark gas trading hub in Louisiana for the first time in over a year, and only the third time in the past three years, according to Reuters data.
Prices remaining above US$60 a barrel are not sustainable as supplies rise and the world weans itself off costly fuel and looks for cheaper energy sources, BP Chief Executive John Browne said on Friday.
Crude oil production from the hurricane-battered Gulf of Mexico has recovered to its highest level since late August, when Hurricane Katrina thrashed the region. Output rose to nearly half its 1.5 million barrels per day capacity.
Also easing supply worries, oil major Shell and trade unions reached a deal on Thursday to end a three-day strike over pensions which had cut production by around 50 per cent at its 418,000 barrels per day Pernis refinery.
Opec output in October slipped 110,000 barrels per day from September to 30.05 million bpd as Iraq's exports dipped to their lowest level for two years, a Reuters survey showed.
But output from the 10 Opec members not including Iraq rose 170,000 bpd to 28.28 million bpd, according to the survey of consultants, shippers, industry and Opec sources.
- REUTERS
NEW YORK - Oil prices fell over US$1 on Friday from the previous day's US$2 rally, as a mild start to the Northern winter heating season and recovering US production buffered supplies.
US light crude oil prices settled down US$1.20 to US$60.58 a barrel while London Brent crude fell US$1.27
AdvertisementAdvertise with NZME.