LONDON (AP) - Crude oil futures dipped Friday, little changed from a $2 US surge in prices the day before that forced investors anticipating a falling market to cover their bets.
Light sweet crude for February delivery dropped 18 cents to $45.38 a barrel in European electronic trading on the New York Mercantile Exchange. Prices for heating oil were also down at $1.2728 a gallon.
In London, the Brent crude for February delivery was down six cents to $42.79 on the International Petroleum Exchange.
Oil editorial manager Esa Ramasamy of Platts, an energy reporting agency, said Friday`s drop was negligible, compared with the rapid rise earlier.
Analysts said prices had been expected to go lower but the fall was curtailed by the news that Shell had temporarily shut down its 140,000-barrel-a-day Draugen field in the Norwegian Sea after bad weather prevented repairs to damaged crude oil loading equipment. Shell reduced production at the field to 75,000 barrels after the loading equipment was damaged.
Signs that the Organization of Petroleum Exporting Countries will cut production further when they meet at the end of this month were also prompting jitters among traders, Ramasamy said.
``That will move the markets more,`` he said.
In December, OPEC members agreed in Cairo to reduce production by one million barrels a day from the start of 2005 to bring the cartel closer to its official output ceiling of 27 million barrels.
OPEC ministers said then that they were ready to reduce output again if needed when they meet in Vienna on Jan. 30 to review the situation.
Efforts to tighten supplies have been a response in part to unusually balmy weather in the northeastern United States - home to the main heating oil markets. That has threatened to unleash a glut of heating oil stocks onto the market as dealers seek to unload supplies before the arrival of spring.
Frosty weather in the U.S. Midwest is also expected to make a dramatic turn to higher temperatures heading into this weekend, according to private forecaster Meteorlogix.
While oil prices are well below the late October high above $55 a barrel, traders remain wary about tight heating oil supplies in the United States and about possible supply disruptions in Iraq and terrorist activity in Saudi Arabia, the world`s top supplier of crude oil.
Prices had fallen on Wednesday after the U.S. Department of Energy reported distillates inventories - mostly heating fuel and diesel - rose two million barrels to 121.1 million for the week ending Dec. 31.
Heating fuel stocks alone increased by 1.2 million barrels to 50.1 million. Gasoline stocks rose two million barrels to 214.3 million. However, crude stockpiles fell 3.3 million barrels to 291.8 million.
