Heating Oil Prices Drop!

Nov. 10 (Bloomberg) -- Crude oil and heating oil fell to the lowest in more than three months after the International Energy Agency reduced its forecast for world oil consumption for a fourth straight month.

The agency estimated 2006 fuel use at 85.01 million barrels a day, down 140,000 barrels a day from last month. U.S. demand fell after prices surged in the wake of Hurricanes Katrina and Rita. U.S. oil and gasoline supplies jumped last week, an Energy Department report showed yesterday. Inventories of natural gas, a competing fuel, rose last week a report showed today.

``The IEA report and the increase in natural-gas supplies are sending us lower,' said Tom Bentz, an oil broker with BNP Paribas Commodity Futures Inc. in New York. ``We've been slowly breaking support for the last two weeks. There will be some resistance in the $55-to-$56 area but once we get through there we are headed for the low $50s.'

Crude oil for December delivery fell $1.28, or 2.2 percent, to $57.65 a barrel at 12:11 p.m. on the New York Mercantile Exchange. Futures touched $57.40, the lowest since July 22. Prices have dropped 19 percent since reaching a record $70.85 on Aug. 30. Prices are up 18 percent from a year ago.

Heating oil for December delivery slipped 4.46 cents, or 2.5 percent, to $1.745 a gallon in New York. Prices touched $1.73, the lowest since Aug. 5. Futures reached a record $2.21 on Sept. 1. Prices are up 24 percent from a year earlier.

Warmer Weather

Heating fuel use is lower because of warm weather in the northern part of the country. Home-heating demand in the Northeast will be 7 percent below normal through Nov. 17, said Weather Derivatives, a forecaster in Belton, Missouri. Consumption in the north-central U.S. will be 16 percent below normal.

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