Oil prices slipped today in anticipation of increased US crude inventory levels, after rising sharply in the previous session on US government predictions that a colder winter ahead will help lift worldwide demand for crude during the fourth quarter.
In a monthly report, the US Energy Department's Energy Information Administration estimated global demand for oil will be 1.8 million barrels a day higher in the fourth quarter than it was during the same period last year.
The report follows a prediction last Thursday from the US National Oceanic and Atmospheric Administration that temperatures in the US will be 1.3 per cent colder than last year, although they'll be 2.8 per cent warmer than average.
Oil prices have been volatile in recent days as investors have debated whether oil supplies are adequate to meet fourth-quarter demand. Some investors feel prices have peaked for the year and are due to begin a seasonal decline; others feel prices could rise again and set new records.
Light, sweet crude for November delivery fell 12 cents to $80.14 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract rose $1.24 to settle at $80.26 a barrel yesterday in New York.
November Brent crude fell 8 cents to $77.41 a barrel on the ICE futures exchange in London.
Traders are now looking ahead to tomorrow's EIA report on petroleum inventories.
According to a Dow Jones Newswires survey of analysts, crude oil inventories are expected to have gained 1 million barrels in the week ended Oct. 5, while refinery use is expected to have fallen 0.1 percentage point to 87.4 percent of capacity. Vienna's PVM Oil Associates also anticipated US "crude inventories building by almost 1 million barrels."
Petrol inventories are expected to have fallen 300,000 barrels last week. Distillates, which include heating oil and diesel fuel, are expected to have declined 600,000 barrels.
Heating oil and gasoline futures shed less then half a penny to $2.1822 a gallon and $2.0171 a gallon. Natural gas futures lost 2 cents, fetching 6.861 per 1,000 cubic feet.
AP