Wednesday, December 28 2005 11:41 Hrs (IST) - World Time -

Singapore: Oil prices continued their fall today (Dec 28,2005) on warmer weather forecasts in the United States, dealers said.

At 11:18 am (local time), New York's main contract, light sweet crude for delivery in February, lost 31 cents to 57.85 dollars a barrel from its close of 58.16 dollars in the United States yesterday (Dec 27,2005).

"The period of forecasted warm weather in the United States has been extended to the first four weeks of the new year. This has driven the price of all energy commodities down," said Dariusz Kowalczyk, Hong Kong-based senior investment strategist with CFC Seymour.

The US National Weather Service has predicted mild temperatures through March.

Kowalczyk said the warmer US weather has driven down demand for heating oil, and with the relatively ample world and US oil supply, prices have turned bearish.

Mike Fitzpatrick, an analyst at Fimat, said, "The supplies of crude and distilled products appear sufficient to carry the market through the winter."

US reserves of crude have increased 12.4 percent over last year, while heating fuel reserves are up 11.1 percent and natural gas 2.3 percent over the average of the past five years, according to the US Department of Energy.

Despite this bearish outlook, Kowalczyk said the market is still changeable.

"It all depends on the weather which is unpredictable, but things can change. The winter is still quite long and anything can happen," he said.