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Oil prices lower amid warmer US forecast

NEW YORK -- Oil prices slipped in quiet trading yesterday, turning lower on warmer than usual winter weather in the United States and expectations of an agreement between Russia and Belarus over natural gas prices.

Trading was muted because the New York Mercantile Exchange closed its trading floor in observance of the national day of mourning for former US President Gerald Ford.

In late electronic trading, light sweet crude for February delivery on the Nymex fell 16 cents to $60.89 a barrel. Heating oil fell 0.42 cent to $1.6440 per gallon, while natural gas futures were unchanged at $6.299 per 1,000 cubic feet.

February Brent at London's ICE Futures exchange -- which was open yesterday -- dropped 42 cents to settle at $60.44 a barrel.

The market's short-term focus has turned to demand for winter fuels, particularly in the US Northeast, the world's largest heating oil market.

Forecasts from the National Weather Service are for mild temperatures in many parts of the country into the middle of January. That could curb demand for winter fuels and has sent oil prices lower.

Government data last week also showed US heating oil inventories at 4.6 percent above their five-year average levels.

Energy prices were also calmed by a possible deal between Russia and Belarus, which had previously been clashing over natural gas prices but are now in talks.

Analysts said the market could still find some support from longer-term concerns over the security of supplies and on expectations of robust growth in demand.

They cited geopolitical concerns in the Middle East, unrest in Nigeria's oil-producing regions, and demand in China and India.

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