Global Biz

Oil falls below $82 on warmer weather expectations

(Agencies)
Updated: 2010-01-12 13:57

SINGAPORE: Oil prices fell below $82 a barrel Tuesday in Asia on expectations a frigid cold spell in parts of the US, Europe and Asia will ease in coming weeks, weakening crude demand.

Oil falls below $82 on warmer weather expectations

In this January 5, 2010 photo, Kevin Richards of Norton & Haines Hauling, puts away a fuel hose after topping off about 30,000 gallons of home heating oil into the underground storage tanks at Gleason's oil depot in Framingham, Mass. Oil prices jumped above $83 a barrel Monday, January 11, amid signs of strong Chinese demand for crude, a weakening US dollar and a strong flow of speculative funds into commodities. [Agencies]

Benchmark crude for February delivery was down 61 cents to $81.92 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

On Monday, a weakening US dollar helped push the contract to a 15-month high near $84 a barrel before it settled down 23 cents at $82.52.

Crude prices have jumped from $69 a barrel a month ago as cold winter weather, especially in the US Northeast, boosted demand for oil products such as heating oil. Forecasters now expect those freezing temperatures to rise the rest of this month.

"The bullish impetus off of the dollar weakness was largely offset by warmer Northeast temperature expectations for the next couple of weeks," Galena Illinois-based Ritterbusch and Associates said in a report.

The euro fell slightly against the dollar in early Asian trading Tuesday and the dollar was steady against the yen.

In other Nymex trading in February contracts, heating oil fell 1.7 cents to $2.16 a gallon and gasoline fell 1.32 cents to $2.13 a gallon. Natural gas futures were up 2.6 cents at $5.48.

In London, Brent crude for February delivery fell 64 cents to $80.33 a barrel on the ICE Futures exchange.