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Weather forecast keeps oil price at more than US$57

Crude oil futures fell on Friday but held above US$57 a barrel as a forecast calling for colder weather in the US Northeast next week tempered a selloff tied to rising supplies and slack demand.

Analysts said that with crude plentiful for now, any short-term upward pressure on prices would likely come from distillates, such as heating oil and diesel, with the arrival of the Northern Hemisphere winter.

After a brief rise to US$58.20, light sweet crude for December delivery fell US$0.27 to settle at US$57.53 a barrel on the New York Mercantile Exchange, its lowest level since July 21.

Brent crude slipped US$0.69 to settle at US$54.99 on the ICE Futures exchange in London.

Oil prices are 19 percent below the Aug. 30 high of US$70.85, falling on a combination of warmer-than-usual autumn weather in the US Northeast and Midwest.

"We're still in the midst of seasonal weakness," said oil analyst Phil Flynn of Alaron Trading Corp in Chicago, referring to the months after the summer driving season and before the winter heating season. However, Flynn said he would not be surprised to see energy prices move higher next week if forecasts calling for a cold snap are correct.

"It could be the catalyst that ends this selloff," Flynn said.

Accuweather.com said on Friday that warmer air from the south would move as far north as the Great Lakes this weekend but it predicted that "the cold air that has been building in Canada's Arctic will finally begin its push south early next week, moving into the Upper Midwest on Monday. By midweek it will bring near freezing temperatures and the possibility of snow to the Great Lakes and New England."

Nymex heating oil futures fell US$0.02 to settle at US$1.7235 per gallon, while gasoline slid more than US$0.02 to settle at US$1.485 a gallon (3.79 liter).

Natural gas rose US$0.332 to US$11.712 per 1,000 cubic feet (28.3m3).

The US Energy Information Administration released data on Thursday showing that natural gas in storage grew more than expected last week, surpassing a level that many analysts believe is necessary to meet winter demand.
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