Oil Falls From One-Week High on Concern Warmer Weather Will Reduce Demand

Crude oil fell from a one-week high because of concern that warmer weather in the U.S. may reduce demand for heating oil.

Oil pared yesterday’s gains after the Energy Department said stockpiles of distillate fuel, a category that includes heating oil and diesel, increased 1.09 million barrels to 161.3 million. Normal or warmer-than-normal weather is likely in most of the Northeast and Midwest from Dec. 25 to Dec. 29, according to Commodity Weather Group in Bethesda, Maryland.

Middle distillate supplies were “a bearish number seasonally speaking,” Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania, said in a note to clients. “Last year saw a 2.95 million-barrel draw.”

Crude for January delivery fell as much as 57 cents, or 0.6 percent, to $88.05 a barrel and was at $88.15 on the New York Mercantile Exchange at 4:14 p.m. Singapore time. Oil increased 34 cents, or 0.4 percent yesterday to $88.62 a barrel, the highest settlement price since Dec. 7. (more)