Oil prices at lowest level in over 3 months

10-Nov-05

After the U.S. government reported a rise in supplies of oil and gasoline, oil prices fell to their lowest level in more than three months, settling below US$59 a barrel. Light sweet crude futures for December delivery fell to settle at US$58.93 a barrel on the New York Mercantile Exchange. In London, Brent crude futures settled at US$56.88 per barrel. The U.S. Energy Information Administration has reported a rise in crude oil inventories by 4.5 million barrels to 323.6 million barrels in the week ending Nov. 4 from a week earlier. Crude stocks are about 13% higher than year ago levels. However, heating oil supplies have dropped at a time when they should be building. Will heating-oil supplies, after dropping for seven straight weeks, be able to catch up with growing demand into the winter. Warmer-than-usual weather in the U.S. this week has helped to bring prices down from late August highs above US$70 a barrel. The first cold spell could, however, put a stop to the downtrend in prices.