Vol. 5 Num 156 Thu. October 28, 2004  

Oil holds at $55, braced for winter

Oil prices held firm around $55 a barrel on Wednesday as traders braced for the start of the northern winter with thin heating oil supplies.

US light, sweet crude oil futures fell 14 cents to $55.03 a barrel, still close to an all-time high of $55.67 hit on Monday. London Brent crude traded down 26 cents to $51.30.

Oil prices have surged 70 percent this year, driven by blistering demand growth that has pushed global production to its limit. Fears that refiners have not made enough heating oil to last the winter have added fuel to the rally this month.

Japan's deficit of winter kerosene stocks continues to narrow versus last year, data showed on Wednesday, but US government data due at 1030 EDT is expected to show tighter supply in the world's biggest consumer.

US distillate inventories, including heating oil, are forecast to have fallen 900,000 barrels last week, their sixth-consecutive drop, a Reuters survey found. Data for the previous week showed heating oil stocks 12 percent below the year-ago level.

In Japan, the world's third-largest energy user, kerosene stocks jumped five percent last week to stand about 8.5 percent below the end of October 2003, data released by the Petroleum Association of Japan (PAJ) showed.