Reply #3: Oil Falls as Warmer Weather May Cause U.S. Inventories to Rise [View All]

http://www.bloomberg.com/apps/news?pid=10000086&sid=aSil.vruEZsc&refer=latin_america

Jan. 5 (Bloomberg) -- Crude-oil prices slipped from a two- week high as forecasts for warmer-than-normal weather in the eastern U.S. indicated inventories may increase.

``The market is reacting to substantial demand losses because of extremely warm weather in the eastern U.S,'' said Deborah White, a Paris-based economist at Societe Generale. ``Supplies seem to be ample and adequate for the moment.''

The U.S. National Weather Service predicts temperatures will exceed the seasonal average from Jan. 10 through Jan. 14 across the Northeast U.S., where most of the nation's heating oil is used. A U.S. government report today is expected by analysts to show stockpiles of heating fuels, grouped as distillates, were little changed last week.

Brent crude for February settlement fell 39 cents, or 1 percent, to $40.65 a barrel at 10:28 a.m. on London's International Petroleum Exchange. On the New York Mercantile Exchange, crude for February delivery slid 33 cents to $43.58, 22 percent below its October record of $55.67.

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