Oil

Oil falls on expectations US temperatures will moderateLONDON (AFX) - Oil fell on expectations temperatures in the US Northeast are set to moderate, decreasing heating oil demand.At 3.27 pm, front-month Brent North Sea crude contracts for April delivery were down 88 cents to 57.26 usd per barrel. The contracts dipped 81 cents to close at 58.14 usd yesterday.Meanwhile, front-month New York light sweet crude contracts for March delivery, which expire later today, were trading at 57.71 usd a barrel, down 1.66 usd from Friday's close. NYMEX did not issue a settlement price yesterday as US markets were closed for the Presidents Day holiday."Prices have pulled back significantly, particularly heating oil, as weather remains the primary focus," said Fimat analyst Mike Fitzpatrick.He added as the winter draws to a close amid still healthy inventory levels, and as economic signals from the US remain mixed, prices will struggle to hold near 60 usd per barrel this week. Weather forecasters have said the cold in the US Northeast, the world's largest heating oil market, should ease this week. Forecasts aside, the winter is, in any case, drawing to a close, analysts note.As a result, the market's attention is fast turning to the US summer driving season, when demand for gasoline typically surges.Jim Ritterbusch, President of Ritterbusch & Associates, this week's US inventory data might support of oil prices, especially if it shows a decline in refinery operating rates or gasoline production capacity.The data is being released on Thursday, a day later than usual on account of the Presidents' Day holiday Monday.Oil could also find some support this weak from geo-political tensions with Iran, as the UN Security Council's deadline for Iran to halt sensitive uranium enrichment work expires Friday.Uranium is used to fuel for civilian reactors but can also produce atom bomb material. Iran's president Mahmoud Ahmadinejad has said his country will not halt nuclear fuel work as a precondition to UN talks. "There is certainly some concern western leaders will tighten sanctions" after Friday's deadline expires, said Fitzpatrick.Oil prices were steady earlier in the session, supported by concerns over possible supply disruptions in Nigeria, where three European oil workers were kidnapped late Sunday."Yesterday, there was news of further kidnappings of oil workers and with presidential elections coming up in April, many believe that the situation can only get worse before it gets better," said Sucden analyst, Michael Davies.Also supporting prices were worries over potential supply glitches from a fire which halted operations at Valero Energy in Texas over the weekend. Valero oil refinery processes 158,000 bpd.