Oil prices fall, cold weather limits losses

29th December 2010, Comments 0 comments

Oil prices fell on Wednesday but the declines were capped by strong demand for heating fuel amid freezing temperatures in the United States and Europe, analysts said.

Brent North Sea crude for delivery in February dropped 28 cents to 94.10 dollars a barrel in London trade.

New York's main contract, light sweet crude for February slid 35 cents to 91.14 dollars.

"As long as the extreme cold in the northern hemisphere persists, this will lend some support to oil prices in the near term," said Barclays Capital analyst Chen Xin Yi. The United States is the world's biggest oil consuming nation.

Further travel chaos was meanwhile expected in the US northeast on Wednesday after hundreds of flights were cancelled and the region dug out from what what some are calling "Snowpocalypse."

The frustration for travellers remained after one of the biggest blizzards in years, which slammed much of the eastern seaboard from the Carolinas into Canada's Maritime provinces.

Oil prices had risen on Tuesday amid expectations of a fall in US energy stockpiles caused by the cold weather.

US reserves fell by about 15 million barrels in the first half of December in the face of brisk demand and end-of-year inventory adjustments by refiners.

New figures on US stocks are to be published Thursday.


© 2010 AFP

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