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DJ OIL FUTURES: Crude Oil Slips As Products Weaken Further
(Comtex Business Via Thomson Dialog NewsEdge)Jan 10, 2006 (Dow Jones Commodities News via Comtex) --By Masood Farivar
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Oil prices fell for a second straight day Tuesday as petroleum products continued to weaken.
The sharp decline in petroleum products came amid expectations of rising inventories in weekly data due Wednesday from the federal Energy Information Administration. Analysts surveyed by Dow Jones Newswires expect gasoline stocks to rise by 1.1 million and distillate stocks, which include heating oil and diesel fuel, to post a build of 1.7 million barrels.
Product stocks have been on the rise in the past couple of weeks as unseasonably warm weather in the Northeast has slashed demand for home heating oil in the region, while a sharp runup in gasoline prices in December has attracted a deluge of imports from Europe.
"The focus today was clearly on refined products," said Andy Lebow, senior vice president with Man Financial in New York. "They certainly weakened dramatically more than the crude oil. It would be very hard for crude to maintain its strength if products continue to weaken like this."
The February crude contract on the New York Mercantile Exchange slid 13 cents to $63.37 a barrel after rallying as high as $64.20 in overnight trading.
February heating oil ended with a loss of 2.98 cents at $1.7379 a gallon, while February gasoline lost 3.27 cents to finish at $1.7350 a gallon.
Final settlement prices weren't in yet.
The early gains in crude oil came on news that Iran had broken seals on its nuclear enrichment facility.
Tehran said it would only conduct research, not enrich uranium, at the facility, but the move nonetheless raised worries about a potential military confrontation between the U.S. and Iran over Iran's suspected efforts to build nuclear weapons.
"Iran just brought back the term 'terror premium' back in vogue," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
-By Masood Farivar, Dow Jones Newswires; 201-938-2094; masood.farivar@dowjones.com
(END) Dow Jones Newswires
01-10-06 1515ET
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