Oil prices fell in the third week of December. The US market sent opposing signals, with warmer weather balancing news of record demand. Spot Brent was trading at $56.35 a barrel on 21 December, compared with $59.69 a barrel a week earlier.
Oil prices fell in the third week of December. The US market sent opposing signals, with warmer weather balancing news of record demand. Spot Brent was trading at $56.35 a barrel on 21 December, compared with $59.69 a barrel a week earlier.The latest weekly oil data from the US Energy Information Administration showed average total implied daily oil demand reaching 22.2 million barrels a day (b/d) in the week to 16 December - the highest ever and the first time that the figure has surpassed 22 million b/d. Crude stocks rose marginally during the week but gasoline and distillate supplies both slipped, by 0.1 per cent and 2.1 per cent respectively. 'Taking the major products together and excluding the volatile 'other oils' category, demand growth for December to date is stellar at 4 per cent,' says Paul Horsnell of Barclays Capital. 'Distillate demand is running 6 per cent up on the average for last December Gasoline demand remains very strong.' However, the recent cold spell in the northeast US appears to be at an end and the National Weather Service in mid-December published a longer-term forecast predicting a mild first quarter of 2006 - adding fuel to OPEC fears of weaker demand ahead. A report from the Centre for Global Energy Studies published on 19 December estimated that OPEC would need to curb output by 1.3 million b/d during 2006 to prevent prices falling below $45 a barrel. A very different prediction came from Arjun Murti, the Goldman Sachs analyst who hit the headlines earlier in the year with talk of oil at $100 a barrel. In a new research report, Murti forecasts oil prices anywhere from $50-105 a barrel up until 2009 and warns that without more investment in increasing capacity, they could cross the top end of this range.More immediate market jitters were caused by a fresh bout of trouble in Nigeria. The Royal Dutch/Shell Group was forced to shut off 180,000 b/d of production as an attack on a pipeline in the Niger Delta region caused a serious fire.