LONDON (AFP) – The price of crude oil dropped under 82 dollars Tuesday on expectations of easing heating fuel demand as warmer temperatures reach parts of the United States recently hit by a cold snap, traders said.
New York’s main futures contract, light sweet crude for delivery in February fell 72 cents to 81.80 dollars a barrel.
The New York contract had hit a 15-month peak of 83.95 dollars a barrel on Monday before traders decided to bank profits.
Elsewhere on Tuesday, Brent North Sea crude for February was down also by 72 cents at 80.25 dollars in midday London trading.
Weaker oil prices “are the result of weather forecasts in the United States that the temperatures would be moderating this week,” said Purvin and Gertz energy consultancy analyst Victor Shum.
“It looks like in the US the cold snap is coming to an end.”
Kuwait’s Oil Minister Sheikh Ahmad Abdullah al-Sabah on Tuesday said that at around 82 dollars, the price of crude oil was “fantastic.”
Oil prices are “fantastic… because of what is happening with the (cold) weather in Europe and as demand is picking up,” the minister told reporters outside parliament.
The minister said Kuwait does not want any change to production quotas when the Organization of Petroleum Exporting Countries meets in March.
He also expected demand to pick up in the second quarter of 2010 as the global economy is expected to continue its recovery and as crude inventories decline.
Elsewhere on Tuesday, the market was following development in OPEC member Nigeria, where gunmen kidnapped three Britons and a Colombian working for Anglo-Dutch oil giant Shell, while shooting dead their police escort.
The four were seized around 7:00 am (0600 GMT) on a road leading from the southern oil city of Port Harcourt to the Shell-operated Afam power plant, police said.
“They were ambushed by gunmen,” Rita Abbey, police spokeswoman for Rivers State told AFP.
“They are Shell contractors who were going to Aba in Abia state,” she said, adding police had launched a search in and around the town situated northeast of Port Harcourt.
The gunmen shot dead the police officer escorting the group and wounded their driver.
It is the first major kidnapping in southern Nigeria for months, following a lull in the wake of a government amnesty which saw thousands of militants lay down their arms.
Armed groups claiming to seek a fairer share of oil revenue for local communities have since 2006 staged attacks on oil installations in the Niger Delta, playing havoc with crude output and international oil prices.
Oil prices had meanwhile closed lower on Monday as traders locked in profits after a brief bounce on the back of robust Chinese economic data that pushed the barrel to a 15-month high near 84 dollars.
China, the world’s second-largest energy consumer behind the United States, saw exports surge 17.7 percent in December, after 13 months of declines, the country announced on Sunday.
The jump in exports renewed market hopes that a sustainable global recovery is under way, led by China’s huge economy.
Chinese oil imports rose to a record five million barrels a day in December, a 48 percent jump compared with the same month in 2008.