Asian Oil prices Drop on expectations of a mild Winter
Pakistan Times Business & Commerce Desk

SINGAPORE: Crude oil prices slipped marginally in Asian trade Tuesday as the market increasingly turned to the view that winter in the northern hemisphere will be mild, dealers said.

At 4:30 pm (0830 GMT), New York's main oil contract, light sweet crude for delivery in December, dropped four cents to 46.83 dollars a barrel from its closing 46.87 dollars in New York on Monday.

The contract fell as low 46.53 dollars in morning Asian trade.

"What I can say is there is no indication that it is going to be a cold winter," said Eswaran Ramasamy, the Singapore-based director for Asian oil markets at energy information provider Platts.

"At this time last year, winter had already set in some parts of Europe (and) the US ... so that could be a bearish factor in the marketplace."

US Oil Stockpiles

Rising US oil stockpiles have also calmed the market's initial worries of a supply crunch during the northern hemisphere winter, dealers said.

"It seems the oil markets have built in confidence that the rising crude inventories that we've seen over the past couple of weeks will continue to offset current tight supplies," US-based Alaron Trading Corp. energy analyst Phil Flynn said in a report published on the company's website.

The Extent

Oil prices have fallen by almost 10 dollars a barrel from an all-time high of 55.33 dollars in New York on October 18 as rising US stockpiles have calmed market fears of a northern winter supply crunch.

The weekly snapshot of US commercial crude oil inventories, due out on Wednesday, is likely to show another increase in stockpiles, dealers said.

Last week's report by the US Energy Department showed crude oil inventories had risen 1.8 million barrels to 291.5 million.

But distillates, mostly heating oil and diesel, fell 100,000 barrels to 115.6 million, the eighth consecutive drop.

Dealers View

Dealers said another factor that had lifted market sentiment was the decision on Monday by Nigeria's main labour movement and a coalition of civil society groups to suspend a nationwide general strike.

Although previous industrial action has not disrupted Nigeria's daily output of some 2.5 million barrels of crude oil, markets had been nervous about the effects a nationwide strike could have on Africa's biggest exporter.●