Natural gas and heating oil futures fell yesterday amid milder weather in the eastern half of the United States. The decline also followed the release of government data that showed a smaller-than-expected decline in natural gas stocks last week.
Oil prices held steady, though, as OPEC's leader talked of a possible cut in production after the Northern Hemisphere winter. Oil traders were also watching Nigeria, where Royal Dutch Shell PLC said its output was down 180,000 barrels per day after attackers set off dynamite at a pipeline two days ago.
January natural gas futures on the New York Mercantile Exchange fell $1.348 to close at $12.923 per 1,000 cubic feet. January heating oil futures dropped by 1.64 cents to settle at $1.74 per gallon. Light sweet crude for February delivery fell 28 cents to settle at $58.28 a barrel on Nymex, where gasoline futures finished less than half a cent higher at $1.5406 per gallon.
In London, February Brent futures declined 17 cents to close at $56.55 a barrel on the ICE Futures exchange.
The decline in home heating fuels came as Accuweather.com and other weather forecasters said the region east of the Rockies would warm up as Christmas approaches, with temperatures in the Midwest rising into the 50s.
Further depressing natural gas prices was a report from the Energy Department that showed a 162 billion cubic feet withdrawal of natural gas in the United States last week, putting total gas in storage at 2.8 trillion cubic feet, or more than 2 percent above year-ago levels. Analysts surveyed by Dow Jones Newswires were looking for a draw of 169 billion cubic feet.
Also yesterday, the president of the Organization of Petroleum Exporting Countries, who met in Beijing with Chinese policy makers, said the group was likely to reduce its crude oil production next year.
''I expect OPEC to decrease output for the second quarter," Sheik Ahmed Fahd al-Ahmed al-Sabah said, adding that the group isn't expected to change its production policy for the first quarter. His remarks were the latest hint from OPEC of its concerns that oil demand will fall after winter, bringing prices down.