The weekly data of the Energy Information Administration reported a rise in inventories of gasoline, heating oil and diesel fuel, causing oil prices to dip to a 19 month low. Crude oil stockpiles fell for the fourth straight week, but refined product inventories grew faster than market analysts had expected, pressuring prices lower. Running of US refineries at over 91% capacity amid strong imports and weaker demand for products has been an anchor on the market.
Light, sweet crude for February delivery dropped by US$1.62 to settle at US$54.02 a barrel on the New York Mercantile Exchange, the lowest settlement since June 10, 2005. February Brent crude fell to US$53.78 a barrel on the ICE Futures exchange in London. These prices are a reminder to the market that historically oil costs much less. On an average, a barrel of oil fetched US$41 in 2004 and US$30 in 2003.
OPEC had resolved to cut output by 1.2 mln bpd in November, but has delivered only about half of its the pledged production cuts. The market waits the implementation of an OPEC decision to curtail output by another 500,000 bpd beginning on Feb. 1.
11-Jan-07 
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