Oil eased below $58 a barrel today as some investors focused on forecasts for milder weather in the United States, the world's top energy consumer, that would curb heating fuel demand.
As forecasts called for warming temperatures in parts of the US by late next week, analysts said that even a return to icy weather would give prices only a limited boost before the arrival of spring, when fuel demand eases.
"The bottom line is, whether it's sooner or later, we are not very far away from losing price support from the weather," said Mike Wittner of investment bank Calyon in London.
US crude for March delivery was down 29 cents at $57.70 a barrel by 11.04am. London Brent crude for April eased 36 cents to $57.24.
Oil sank to a 20-month low of $49.90 on January 18th as mild weather curbed heating oil demand in the United States. Prices recovered to $60 when the winter turned cold this month.
The National Weather Service eight-to-14-day forecast on Wednesday called for above-normal temperatures for most of the eastern half of the US, prompting expectations among some traders the worst of winter may be past.
Forecasts for milder weather follow a report on US fuel inventories this week that sent prices lower.
US distillate stocks, including heating oil, fell by 3 million barrels last week, US government data showed, but less than the 4.2 million barrel draw forecast by analysts.