Reply #54: Oil Falls More Than $2 on Forecasts of Milder U.S. Weather [View All]

http://www.bloomberg.com/apps/news?pid=10000103&sid=aLvxK4ENLNVU&refer=us

Dec. 27 (Bloomberg) -- Crude oil plunged more than $2 a barrel in New York amid speculation that warmer-than-normal weather in the eastern half of the U.S. will bolster fuel inventories.

U.S. supplies of crude oil, gasoline and distillate fuel, a category that includes heating oil and diesel, rose in the week ended Dec. 17, Energy Department figures show. Temperatures in the eastern U.S. will be above normal from Jan. 1 to Jan. 5, the National Weather Service said. New York crude oil has fallen 25 percent from a record $55.67 on Oct. 25 as inventories rose.

``There continues to be plenty of oil around and refiners are running at more than 90 percent of capacity,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA in New York. ``It looks like things will be warming up with temperatures in the 50's by the New Year's holiday. It's become clear that the price was well overdone in late October.''

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The International Petroleum Exchange in London is shut today and tomorrow, and New York trading is below normal, helping exaggerate today's price moves.

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Tsunami

The earthquake yesterday off Indonesia that triggered tsunami waves across the Indian Ocean is unlikely to affect oil prices, traders said. The magnitude 9.0 quake generated waves as high as 10 meters (33 feet) and the death toll has risen to more than 19,000.

There were no immediate reports of damage to oil facilities in Indonesia, Southeast Asia's biggest oil producer. Exxon Mobil Corp., which operates gas fields in Aceh, hasn't experienced production disruptions, spokeswoman Deva Rachman said by telephone yesterday.

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