This could be the reason :
Monday December 22, 4:13 pm Eastern Time
NYMEX oil prices end off on Iraq, weather outlook
NEW YORK, Dec 22 (Reuters) - NYMEX oil prices ended lower Monday on expectations that Iraqi oil exports could restart within weeks when crude supply was already seen ample.
The bearish news came amid U.S. weather forecasts which signalled lacklustre heating oil demand.
''Even if you take Iraqi crude out of the picture, we still have plenty of supply, plus with the weather, it hasn't been much of a heating oil season,'' said Rocky D'Esposito of RJ Futures in New York.
Volume was meager as major players avoided large positions ahead of the Christmas holiday which falls in the middle of the week.
February crude finished off 22 cents a barrel at $18.32, just two cents above its session low.
January heating oil ended 0.81 cent a gallon lower at 51.15 cents.
The National Weather Service's six-to-10 day forecast starting December 25 called for above average temperatures for the U.S. Northeast, the largest heating oil market in the world.
''It seems gasoline is holding up the most,'' said D'Esposito. January gasoline settled 0.69 cent a gallon lower at 55.70 cents.
A brief fire at Exxon's large 411,000 barrel per day (bpd) Baytown, Texas refinery cut gasoline's losses though Exxon said refinery operations were unaffected.
Overseas, the U.N. humanitarian coordinator in Baghdad said on Monday that Iraq had handed him the aid distribution plan for its oil-for-food deal with the U.N.
On Saturday, Iraq's oil minister Amir Muhammad Rasheed said that he expected oil exports to start in two weeks time.
The oil pact, which went into effect a year ago, allows Iraq to export $2 billion worth of oil over six months on a renewable basis to buy food, medicine and other essentials for Iraqis, suffering under sanctions imposed after its 1990 invasion of Kuwait.
This would be the third six month period of the plan. The second period ended December 5, but Iraq had grievances about how aid was distributed and delayed the restart until a new aid plan was drawn up.
The oil sales will enter a market already believed to be on the brink of oversupply amid a 10 percent increase in OPEC's official production ceiling when key Asian demand is expected to drop due to the region's economic turmoil. |
