Oil prices fall below US$60 a barrel on forecasts of warmer-than-normal U.S. weather

Oil prices fell below US$60 a barrel in Asian trading Monday on forecasts of above-normal temperatures in the United States, a major consumer of heating oil and gasoline.

Photo: Oil prices fall below US a barrel on forecasts of warmer-than-normal U.S. weather

Light, sweet crude for April delivery dropped 64 cents to US$59.41 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore. The contract fell by more than 2 percent on Friday to settle at US$60.05 a barrel, thanks to weakness in heating oil.

"The oil futures market has extended losses that happened during late trading on Friday," said Victor Shum of Purvin & Gertz in Singapore. Shum said heating oil futures were facing downward pressure exerted by the end of the winter season.

In Washington D.C., temperatures Saturday hit a peak of 67 degrees Fahrenheit (19 Celsius), much warmer than normal. Southwest winds have been forecast to warm the U.S. Plains and the East Coast, according to AccuWeather.com.

Also undermining prices were expectations that the Organization of Petroleum Exporting Countries will not change its output target when the cartel meets Thursday in Vienna, Austria, Shum said. Analysts believe what OPEC decides to do with production will help determine oil prices both over the long and short term.

Traders are also awaiting several reports out later this week that could help move the oil market. The International Energy Agency releases its monthly report on Tuesday and the National Weather Service updates its long-range forecasts on Thursday.

Markets remain focused on developments in the Middle East over Iran's failure to comply with demands to halt its uranium enrichment program. Washington is pushing for tougher U.N. sanctions on Tehran and introducing legislation to punish foreign oil companies that invest in Iran's energy industry, reports AP.

In other Nymex trading, heating oil futures lost 1.73 cents to US$1.6949 a gallon (3.8 liters) while natural gas prices declined 3.8 cents to US$7.04 per 1,000 cubic feet.