Oil

Dec. 1 (Bloomberg) -- Crude oil in New York was littlechanged after rising yesterday because cold weather raisedforecasts of heating demand and a report showed U.S. stockpilesfell more than expected. U.S. natural gas futures yesterday closed at its highest ina month as a weather system covered the northern Plains with snowand cold spread over the Midwest. Oil inventories dropped 4.2million barrels in the week ended Nov. 25, according to an EnergyDepartment report, eight times the decline forecast in aBloomberg survey of 13 analysts. ``There is a big cold front coming through,'' said ChrisMennis, owner of oil trader New Wave Energy in Aptos, California.``People are saying it's going to be extremely cold,'' andheating fuel supplies are only sufficient for an average winter,he said.

Crude oil for January delivery was at $57.36 a barrel, up 4cents, in after-hours electronic trading on the New YorkMercantile Exchange at 3:49 p.m. Singapore time. Prices today are26 percent higher than a year ago. The contract yesterday rose 82 cents, or 1.5 percent, to$57.32, its first increase in four sessions. Prices are down 19percent since touching a record $70.85 on Aug. 30, the day afterHurricane Katrina struck the Gulf of Mexico coast. Heating demand in the U.S. Northeast, where 80 percent ofU.S. heating oil is consumed, will be 18 percent above normalthrough Dec. 7, Weather Derivatives, a forecaster in Belton,Missouri, said yesterday.

Heating Oil

Temperatures for much of the northern U.S. will be 10degrees Fahrenheit to 20 degrees Fahrenheit below normal thisweek, forecaster AccuWeather Inc. said. ``The region from the central and northern Plains to NewEngland will be colder than normal during December,'' AccuWeathersaid in a 30-day forecast issued yesterday. Heating oil for January delivery rose 0.36 cent, or 0.2percent, to $1.6933 a gallon in after-hours trading. It rose 1.77cents, or 1.1 percent, to $1.6897 yesterday. U.S. heating oil supplies rose 1.6 million barrels last weekto 57.1 million, the department said in a report yesterday.Supplies last month averaged 54.9 million barrels, five millionmore than the same month last year. ``Distillate inventories in the United States are quite high.So people are starting to feel that even if it gets cold there'splenty of distillate around,'' said Tony Nunan, an assistantgeneral manager of international petroleum business at MitsubishiCorp. in Tokyo.

Economy

Oil also rose yesterday after a report showed the U.S.economy expanded at a greater-than-expected annual rate of 4.3percent in the third quarter. Gasoline stockpiles fell. ``It's another confirmation'' that demand wasn't destroyedby the high pump prices after hurricanes Katrina and Rita struck,New Wave's Mennis said. U.S. gasoline inventories fell 545,000 barrels to 199.9million, leaving them 2.3 percent below the five-year average forthe week, the department said. Analysts had been expecting a 1.2million barrel increase. Gasoline supplied, a proxy for demand,has averaged 9.2 million barrels a day in the past four weeks, up1.3 percent from the same period last year, the department said. Supplies of distillate, which include heating oil anddiesel, jumped 3.3 million barrels, the biggest increase sinceJuly, and three-times the increase expected by analysts.

Gasoline

``Although this is the time of year when attention isfocused on distillate, I'm casting an eye on gasoline,'' saidDoug Leggate, senior oil analyst at Citigroup Inc. in New York.``Refineries are going to switch to distillate production, whichwill potentially lead to gasoline tightness in the weeks ahead.'' Gasoline for January delivery rose 0.45 cent, or 0.3 percent,to $1.5016 a gallon in after-hours trading. It gained 4.15 cents,or 2.9 percent, to $1.4971 yesterday. Natural gas for January delivery on the New York exchange,rose 15.3 cents, or 1.2 percent, to $12.740 per million Britishthermal units in after-hours trading. It rose 85.1 cents to$12.587 yesterday, the highest closing price since Oct. 28. The Organization of Petroleum Exporting Countries, sourceof more than a third of the world's oil, may decide to keepoutput stable when the group meets in Dubai on Dec. 12,Mitsubishi's Nunan said. OPEC probably shipped 30.5 million barrels a day of oilthis month, led by an output increase from Saudi Arabia, thehighest since 1979. The markets are ``under control'' and adequately supplied,Mohamed bin Dhaen al-Hamli, oil minister of the United ArabEmirates, said Nov. 29. ``Saudi Arabia and the lead members of OPEC are comfortablewith the oil price and they're saying they will not do anythingwith the production quotas,'' Nunan said. ``They're overproducingtheir quotas now, so they'll keep production stable.''