Oil dips to below $82 per barrel

Singapore : Oil slid further to below $82 a barrel on Tuesday from 15-month highs a day earlier, as forecasts showing milder temperatures in the US Northeast signaled lower fuel consumption in the world's largest heating oil market.

Icy weather in the United States so far had drawn down US inventories of distillates, including heating oil. Stocks fell by 1.7 million barrels last week, a Reuters survey showed, their fifth-straight weekly drop.

US crude for February delivery fell 68 cents to $81.84 a barrel at 0347 GMT, after hitting $83.95 on Monday, the highest intraday level since October 2008.


London Brent crude fell 57 cents to $80.40 a barrel.

"The market got a little bit ahead of itself after it broke $82 a barrel quite easily," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
"With the February contract going off the board next week, we will soon be looking ahead to the end of the winter. Refineries should be going back into maintenance soon in preparation for the gasoline season."
US Northeast temperatures were expected to average below normal through Wednesday, then average near to above normal through Friday, with the six- to 10-day forecast for near to above normal, according to DTN Meteorlogix.
Along with this, US heating oil demand was forecast to be normal this week, after surging to 12 per cent above normal last week, the National Weather Service said.



Refiners are also limiting their intake of crude, aiming to reduce a glut in oil products that has prevailed for more than a year despite the recent freeze.
The Reuters poll found that crude oil inventories rose 1.0 million barrels for their second consecutive week of gains. US gasoline supplies also probably climbed 900,000 barrels, ahead of data from industry group American Petroleum Institute (API) at 2130 GMT on Tuesday.


Data from the US government's Energy Information Administration (EIA) will be released on Wednesday.
US and global oil demand will increase in 2010 and 2011, but the growth rate in petroleum consumption will not be as strong as in years past, according to advance details provided to Reuters on a US government monthly energy supply and demand forecast.
The EIA expects the US economy to grow about 2 per cent this year and nearly 2.7 per cent next year, leading to higher demand for oil.

Some support came from tensions in Nigeria's main oil-producing region, which have removed supplies from the market.
Chevron said on Saturday it had been forced to... shut down 20,000 barrels per day (bpd) of crude production in Nigeria, a day after security sources said gunmen had attacked a pipeline operated by the US firm.

"The situation in Nigeria has not improved that much and it is a matter of time before it becomes a problem again," Nunan said.
"We have had a year of reprieve from these geopolitical issues because the collapse in demand had created a cushion of supplies, but now that the economy looks like it will stabilize and return to growth this year, geopolitics is back in the market."
Saudi Arabia, the world's top oil exporter, will keep crude supply to major Asian, European and US buyers largely steady in February, as the kingdom sticks to OPEC supply cuts, industry sources said