London Mild autumn weather and a spurt in petroleum output from non-OPEC countries have helped ease oil prices, but there is a danger of a winter spike in prices for crude and heating oil, a respected energy agency said Monday.
"We are not out of the woods yet. Who can accurately predict the weather?" the Paris-based International Energy Agency said in its monthly report.
In an indication of a possible winter price surge, crude futures prices rebounded Monday after declining over the previous week. January contracts for light, sweet crude jumped 90 cents to $29.34 a barrel on the New York Mercantile Exchange. North Sea Brent, the European benchmark crude, rose 79 cents to $27.35 a barrel on the International Petroleum Exchange in London.
The decline in prices over the past two weeks came despite Iraq's suspension of 2.3 million barrels of daily crude exports in a dispute with the U.N. sanctions committee over pricing policy. Light, sweet crude futures fell from $36.27 a barrel on Nov. 27 to $28.31 on Dec. 8.
While the price of crude is way down from the above-$36 a barrel of autumn, blizzards in the Midwest, with snow as far south as Texas, have helped crude prices bounce back slightly, analysts said.
So, too, have comments by Kuwait and Venezuela that the Organization of Petroleum Exporting Countries might need to slash its output early next year to keep oil prices from plunging.
World oil production rose 730,000 barrels a day last month, or nearly 1 percent, to 78.9 million barrels last month, the International Energy Agency report said an improvement offering comfort to countries struggling to pay the high cost of imported fuel.
Inventories for the world's largest economies increased in October by 7.6 million barrels a day, or 0.3 percent, to 2.56 billion barrels, it said.
However, "stocks are building, but this does not mean they have returned to comfortable levels. They have not," the report said.
World oil production surged last month due entirely to greater output from North America and the North Sea, especially from Mexico and Norway. Demand was tempered by moderate weather in recent months in Europe and North America.
OPEC's output fell 65,000 barrels a day.