Oil prices edged lower today, keeping within sight of $50 a barrel on supply worries in the United States, where weekly data is expected to show a draw in distillate inventories.
A refinery fire in Louisiana helped send prices to a new eight-week high of $49.75 a barrel yesterday, highlighting the market's sensitivity to supply disruptions ahead of this weekend's Iraqi elections and OPEC policy meeting.
US light crude was down 21 cents to $49.43 a barrel, but up nearly 14 per cent since the start of the year after the eastern United States was hit with the first severe cold snap of the winter, boosting demand for heating oil supplies. London Brent was down 26 cents at $46.75 a barrel after hitting a nearly three-month peak yesterday.
Prices leapt yesterday after ConocoPhillips said it had slowed production at its Belle Chasse, Louisiana, refinery after a fire at the weekend that traders said cut gasoline output. But for most, the focus remained on winter fuels.
US supplies of heating oil were running about 4 per cent below last year, the most recent government figures showed, and analysts forecast a 2.6 million-barrel fall in total distillates stocks for the week to January 21st.
Inventories of crude oil and gasoline, both in surplus versus a year ago, were expected to have risen.