Home Heating Oil Stocks 16% Below 2003, Norway Outage Boosts Prices

[hatrack]

LONDON - Oil prices rose Monday as a gas leak closed a large Norwegian North Sea oil field and the threat of a colder-than-normal US winter fueled worries about low heating oil stocks. North Sea Brent blend jumped $1.18 a barrel to $45.75 and US crude was up 32 cents at $49.76 after a four-day holiday break.

Prices rose as a gas leak forced closure of the 130,000-barrel-per-day Snorre A platform and the 75,000 bpd Vigdis field in the Norwegian North Sea. Rising world demand has left little spare capacity in the world supply system, magnifying the impact of sudden disruptions. In Canada the 165,000-bpd Terra Nova platform has been shut for the past week for the investigation of an oil spill.

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The US government last week reported that distillate stocks -- including diesel and heating oil -- had risen for the first week in 10, but that heating oil inventories were 16 percent below last year. Analysts expected this week's inventory report to show distillates up another 1.3 million barrels, as mild weather in the Northeast caps demand. While winter weather in the heavy-consuming US Northeast has so far been relatively warm, many forecasters are predicting a colder-than-usual season in the months ahead.

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OPEC producers are enjoying less of a windfall than $50 oil prices suggest, as big discounts for their lower-quality crude and a weak dollar hit export earnings, OPEC officials said on Monday. The double drain on revenues has convinced OPEC's second biggest producer, Iran, that the group should mop up some 900,000 bpd of leakage above formal supply limits of 27 million. OPEC ministers meet on Dec. 10 in Cairo."

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