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Oil Eases On Mild Weather Outlook

U.S. crude oil futures are near unchanged in light, choppy trading, as oil markets eye next week's OPEC meeting where more output cuts seem likely, while being pressured by expectations of milder weather next week.

Pressure on heating oil futures and the complex also was evident after Wednesday's government data showed higher refinery capacity use, offsetting refined products and crude
oil supply drops.

Natural gas storage data released on Thursday showed supplies were down last week, but slightly less than expected.

On the New York Mercantile Exchange, January crude is with volume light and having traded in a range of $61.55 to $62.53.

"We're trading range bound. Volume is light, and traders are looking for direction." said Tom Knight, trader at Truman Arnold.

The National Weather Service's eight-to-14-day weather outlook released on Tuesday called for above-normal temperatures for most of the nation, after this week's cold snap.

The six-to-10-day forecast for the key heating oil consuming U.S. Northeast was for temperatures above normal, according to private forecaster DTN Meteorlogix.

Crude found some support Thursday from news that Nigerian gunmen attacked an Agip oil pumping station in Bayelsa state in the Niger Delta.

Oil dealers continue to anticipate another production cut from OPEC when ministers meet in Nigeria Dec. 14. The producer group previously agreed to cut 1.2 million bpd starting in November.

As the OPEC meeting nears, Asian demand for West African crude tumbled to a five-month low as China looked to cheaper markets for January cargoes, traders said on Thursday.

TECHNICALS
NYMEX January crude support broke down at $62, with the next support target at $60.95, the Nov. 29 low. Resistance lies at $64.

Heating oil's resistance was at $1.87 with support giving way at $1.79. Support below that is at $1.727, the Nov. 29 low.

The crack spread fell back to $12.46.

RBOB resistance was pegged at $1.70 with support at $1.599, the Nov. 28 low. Gasoline resistance remains at $1.70 with support at $1.60. The crack spread rose slightly, to $6.65.

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