Inventories down: Meteorologists at Weather Derivatives have said demand for heating oil in the US north-east, which has the world’s largest heating fuel appetite, should remain 40 per cent below normal levels until January 11. The weakening in demand is also apparent in the level of US oil inventories, which expanded last week.
Unsettling for OPEC: The speed with which prices had wilted could unsettle producers in the Organisation of Petroleum Exporting Countries, which have been struggling over the last few months to nudge crude back up over $US60 a barrel. Broker Michael Davies predicted that if the warm weather persisted, OPEC could be forced to defend a level of $US50 a barrel. The Organisation of Petroleum Exporting Countries, announced two production cuts near the end of last year totalling 1.7 million barrels a day in a bid to shore up prices.