Oil prices fell from three month highs as mild weather in the US cut deeply into demand for heating fuels. London Brent crude fell 71 cents to US$62.01 and U.S. light sweet crude settled at US$63.50 a barrel, dropping from a high of $64.61 earlier in the session on the back of simmering tensions in the Middle East.
Demand for heating fuels was expected to be 30% below normal this week in USA, as the Midwest and the Northeast (the biggest U.S. heating markets) experienced mild weather.
Tensions continue to mount in the Middle East.
Israeli Prime Minister Ariel Sharon suffered a massive stroke last week and is speculated to be medically unfit to return to politics, creating a void in the Middle East peace process. Iran has also caused concern as Tehran confirmed it would resume research on nuclear fuel.
The Organization of the Petroleum Exporting Countries (OPEC) meets at the end of the month to reconsider output policy. Ministers have so far indicated there is no need to cut output in the second quarter because prices are stable and demand is strong.
10-Jan-06 
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