Tuesday, November 14, 2006

Crude oil futures rose Tuesday as markets remained concerned about supplies heading deeper into winter in the Northern Hemisphere.

With the seasonal rise in oil demand still ahead, and another month before the Organization of Petroleum Exporting Countries meets again, prices were holding near $60 a barrel.

Light sweet crude for December delivery on the New York Mercantile Exchange rose 34 cents to $58.92 a barrel in electronic trading by midday in Europe. December Brent at London's ICE Futures exchange rose 50 cents to $59.55.

Heating oil futures rose 1.85 cents to $1.6785 a gallon on the Nymex, while unleaded gasoline futures increased 0.6 cent to $1.5430 a gallon. Natural gas futures rose 5 cents to $7.944 per 1,000 cubic feet.

"The bottom line fundamentally is that we have seen heavier withdrawals than expected in refined products stocks over the last four weeks," analyst Peter Beutel at advisory firm Cameron Hanover in New Canaan, Connecticut, said in a note to clients.

"The (U.S.) Energy Information Administration is expecting more to come, more larger-than-normal draws, but the International Energy Agency is telling us that we currently have two days more supply in inventories than we did a year ago. One can take what he or she wants from those conflicting pieces of information."

The IEA, in its monthly report Friday, trimmed its outlook for 2006 global oil demand growth to 1.1 percent from 1.2 percent. Demand growth for 2007 held at 1.7 percent.

Still, the energy body also forecast a 2.6 percent jump in fourth-quarter global energy demand, citing high consumption in the United States. The agency noted U.S. consumption was being compared with figures when the impact of Hurricane Katrina and mild weather curbed demand a year ago.

Demand for oil from OPEC was expected to rise 1.6 million barrels a day because of lower output from non-OPEC countries, the IEA said.