Crude oil futures fell sharply on Thursday on pre-holiday profit-taking after government reports of ample fuel supplies amid mild northeastern U.S. weather.
Today's trading is well below Wednesday's $64.15 high, the loftiest since crude reached $64.46 on Sep. 19.
"There's some pre-holiday profit taking; but the National Weather Service forecast for January also reminds people there's not much heating fuel demand," said John Kilduff, senior vice president for energy risk management at Fimat USA.
In the week to Dec. 15, total U.S. distillate supply jumped 1.2 million barrels, with heating oil up 700,000 barrels amid mild temperatures in the key winter fuel consuming region of the U.S. Northeast, data from the U.S. Energy Information Administration showed.
Gasoline supply rose 1.0 million barrels.
A 1.6 percentage point jump in refinery utilization, to 90.7% of capacity, helped pad product inventories even though demand was robust.
U.S. crude oil imports slumped 696,000 barrels per day to 8.9 million bpd, cutting down commercial crude oil supplies by 6.3 million barrels, to 329.1 million, still well above the upper end of the average range for this time of the year.
Shipping delays along the Gulf Coast due to foggy weather were blamed for the sharp drop in imports. As of Thursday, the situation appeared easing.
The number of vessels waiting to enter the Houston Ship Channel fell to 15 Thursday, from 35 Wednesday afternoon, as clear weather allowed the waterway to remain open to navigation overnight, the Houston Pilots Association said.
"We have a cold front moving in, so we don't expect too much fog today either," a pilots official said. "We may be able to remain open."
Winter officially begins on Thursday night, but currently mild weather in the U.S. Northeast will prevail until the end of the month. Regional temperatures will be above normal in January, but have an equal chance of being above or below normal in February through April, the National Weather Service predicted on Thursday.
Above normal January temperatures were expected across the entire northern half of the United States, including the Great Lakes, Plains states and most of the West, the NWS said.
Heating demand was forecast to remain below normal over the next five days, with the six-to-10-day forecast for temperatures to average above normal, private forecaster DTN Meteorlogix said on Thursday.
Latest U.S. economic indicators were not helpful for the energy markets.
The U.S. economy grew at a revised lower-than-forecast 2% annual rate during the third quarter, hamstrung by the sharpest drop in housing activity in more than 15 years, the Commerce Department said.
Also the Philadelphia Fed's survey for December showed a contraction in the region's manufacturing sector, at a negative 4.3 in December, from a positive 5.1 in November.
NYMEX January crude resistance was charted at $64. Support was charted at $61.
Heating oil's resistance was charted at $1.75. Support was at $1.70.
RBOB's resistance was pegged at $1.70, with support at $1.60. Gasoline resistance also was slated at $1.70, with support at $1.60.