KEY POINTS:
NEW YORK - Oil prices fell a dollar to less than US$63 a barrel on Thursday as unusually mild temperatures lingered in the United States, choking off demand for heating oil in the world's biggest energy consumer.
Dealers added that an easing of shipping delays on the Gulf Coast would likely mean a big rebound in US inventories, after intermittent disruptions due to fog cut deeply into stockpiles last week.
US crude for February fell US$1.06 to settle at US$62.66 a barrel, while London Brent dropped 77 cents to settle at US$62.46.
"There's some pre-holiday profit taking, but the National Weather Service forecast for January also reminds people there's not much heating fuel demand," said John Kilduff, energy analyst at Fimat USA.
The US National Weather Service joined a chorus of private forecasters Thursday calling for mild weather to persist into January, extending a stretch of balmy weather that has lowered demand for heating oil and natural gas.
Thursday's losses come after crude touched a three-month high above US$64 a barrel on Wednesday on a government report showing crude stocks fell by a hefty 6.3 million barrels in the week to December 15.
Commercial crude and refined product stocks combined were 400,000 barrels lower than the same time a year ago, a sharp fall from a huge 76 million barrels year-on-year surplus at the end of September.
But crude stocks still stand nearly 2 per cent higher than a year ago, according to the data, and experts are expecting a rebound in inventories this week as operations return to normal on the Houston Ship Channel.
The Houston Pilots Association said it had nearly cleared a backlog of ships waiting to enter the Houston Ship Channel, as a persistent fog that made navigation unsafe since last week finally cleared.
Political tensions in oil-producing countries have also been largely discounted by the market - with the exception of in Nigeria, where further unrest is anticipated in the run-up to presidential elections in April.
Militants stormed an oil facility in operated by Total in the delta's Rivers state on Thursday, but production at the 35,000 barrels-a-day Obagi field was unaffected.
- REUTERS
