SINGAPORE, (AP) -Oil prices fell below $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.
Light, sweet crude for April delivery dropped 44 cents to $59.61 a barrel in electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore. The contract fell by more than 2 percent on Friday to settle at $60.05 a barrel, thanks to weakness in heating oil.
Brent crude contract for April delivery declined 24 cents to $60.89 a barrel on the ICE Futures exchange in London.
“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.
Qatar’s Oil Minister Abdullah bin Hamad al-Attiyah said Monday that world oil stockpiles were being drawn down and current crude prices indicated there was no need for the OPEC to cut production further when it meets in Vienna.
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.
In other Nymex trading, heating oil futures lost 1.33 cents to $1.6989 a gallon while natural gas prices declined 5.8 cents to $7.025 per 1,000 cubic feet.