Oil prices rise to four-week highs as cold weather continues in USA

05-Feb-07

As cold winter weather continues across USA and energy inventories continue at low levels, boosting demand for heating fuel, oil prices rose to their highest levels in four weeks in Asian trading hours. As the US economy grows, with prospects of future growth, sentiment is adding pressure on oil prices to go up. New York Mercantile Exchange's main oil futures contract, light sweet crude for delivery in March, rose to US$59.07 a barrel and Brent North Sea crude for March rose to US$58.50. The US Department of Energy said last week that US distillate stocks -- including diesel and heating oil -- had fallen by a surprisingly large 2.6 mln barrels in the week ended Jan 26, while crude oil reserves climbed by 2.7 mln barrels. In December, OPEC decided to cut production by 500,000 bpd from Feb 1, following a reduction of 1.2 mln bpd in November. The production cuts by OPEC, are not expected to largely impact the market, as the market has already taken into consideration the announced cuts.