Oil prices hold above US$51 as temperatures hover around freezing levels

04-Mar-05

Weather forecasts have predicted temperatures to hover around freezing levels, boosting heating oil demand. Oil prices hovered under US$52 a barrel, coupled by supply strains due to lower U.S. heating oil stocks. Forecastes have predicted Northwest Europe will continue to experience below normal temperatures for the next ten days. U.S. light crude futures slipped to US$51.58 a barrel in New York and London Brent stood at US$50.16. The bullish players continue to see upside in the market, seizing every slight decline as a chance to buy. The market seems more focused on the macro factors like OPEC having little spare capacity, strong demand from the U.S., China and India. Kuwait, Qatar, Venezuela and Indonesia seem to be in favour of keeping OPEC’s formal output limits unchanged when the cartel meets in Iran on March 16. Consensus is growing in OPEC that a US$40-50 range seems sustainable.