Oil prices hover around US$50 per barrel

27-Jan-05

Oil prices hovered around US$50 a barrel as supply worries persist in the United States, where weekly data is expected to show a draw in winter fuel inventories. Supply worries were coupled by a refinery fire in Louisiana which helped send prices to a new 8 week high of US$49.75/barrel in the US. ConocoPhillips slowed production at its Belle Chasse refinery after a fire over the weekend. This reflects market sensitivity to supply disruptions prior to this weekend’s Iraqi elections and OPEC policy meeting. Continued fear in the run-up to this weekend’s Iraqi elections, has served as the primary support for oil prices in recent weeks. Winter arrived late for most of the northern Hemisphere but has been very severe over the last few weeks, helping pull down kerosene heating fuel stocks in No.3 oil user Japan by 7.7% over the last week. Freezing temperatures in the US Northeast, the biggest heating oil market in the world, are forecast to ease by next week and stay warmer than usual in February and March.