Mild Weather Pinches Oil

Oil prices were slipping below $59 Wednesday on unseasonably warm weather in the Northeast and expectations of rising fuel supplies.

Light, sweet crude was last tumbling $2.64 to $58.41 a barrel, and gasoline was slipping 5 cents to $1.56 a gallon. Natural gas was last down 13 cents at $6.17 per million British thermal units, and heating oil was off 6 cents at $1.58 a gallon.

Mild weather has blanketed the Northeast, the country's largest user of heating oil, for the past few weeks and dampened prices and demand. Warmer-than-average temperatures are expected to remain in the region through the middle of the month, according to the National Weather Service's Tuesday outlook.

Brimming supplies have helped drive down prices on heating fuels. Natural gas is now only 13% higher than the five-year average, and distillates, which include heating oil, are 1% below last year. Inventories of distillates, though, are expected to have climbed by 800,000 barrels last week as refiners increased production, according to a Bloomberg poll of analysts.

Refiners likely made more gasoline and boosted stockpiles by 1.5 million barrels last week. Crude inventories, meanwhile, probably dropped by 1.32 million barrels, according to a Dow Jones estimate.

The U.S. Energy Department will release the petroleum supply figures on Thursday, a day late, because the federal government was closed for the past two days.

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