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Oil fell more than a dollar today as warm weather lingered in the eastern United States, curbing heating oil demand in the world's biggest energy consuming nation.
Militant attacks on oil company compounds in Nigeria along with severe vessel delays along the Houston Ship Channel due to fog
limited oil's losses, dealers said.
US crude settled down US$1.22 at US$62.21 a barrel, recoiling from a two-week high last week. London Brent slipped US$1.36 to US$62.13 a barrel.
"It's the weather," said Bill O'Grady, analyst at A.G. Edwards in St. Louis.
US heating demand is expected to be around 25 per cent below normal this week as mild weather persists in the key Northeast and Midwest heating regions, the National Weather Service said on Monday.
The balmy outlook extends a stretch of warm weather in the United States that has cut deeply into energy consumption at the start of the Northern Hemisphere winter.
Opec on Monday said fundamentals of the world oil market show signs of weakening in 2007 as economic growth slows and supply from non-Opec countries rises faster than demand.
"Risks for oil demand appear to be more weighed to the downside, given the dangers to global economic growth emanating from a visibly weakening US economy," Opec said in its monthly report.
Opec's economists expect producers from outside the group to produce 1.8 million barrels per day (bpd) more crude in 2007. If achieved, that would be the fastest non-Opec growth for two decades and would cut demand for Opec oil.
Opec last week decided to make a second output cut of 500,000 barrels per day, to start from February, to prevent stockpiles rising again after the Northern Hemisphere winter.
A Reuters survey showed Opec only met about two-thirds of its November cutback of 1.2 million bpd. Some analysts question whether new limits will be effective in supporting prices that have slid about 20 per cent from a record over US$78 in July.
SHIPPING, NIGERIA
Tankers struggled for the fifth straight day on Monday to deliver oil supplies to refineries in Houston and Texas City, which between them account for nearly 12 per cent of US refining capacity.
Prolonged fog delays in the nation's busiest petrochemicals port have lead some refiners in the area to warn they may need to slow fuel production. But so far no Gulf Coast refinery has announced production cuts as a result of delayed crude oil shipments.
The Department of Energy said last week it was monitoring the situation and ready to loan oil to refining companies cut off from their supplies.
In Nigeria, a car bomb hit an Agip compound and a Shell compound was hit by an explosion on Monday. There were no injuries or immediate impact on oil output from the world's eighth largest exporter.
Nigerian crude supplies, already down by about a fifth because of militant attacks, have been further trimmed by gunmen who seized an oil platform operated by Royal Dutch Shell in the Niger Delta, shutting its 12,000 bpd oil output, the company said on Saturday.
- REUTERS