NEW YORK -- Crude oil prices kicked off 2007 with a plunge below $59 a barrel Wednesday, as persistent mild weather in the United States led traders to bet on lagging demand for heating fuels.Light, sweet crude for February delivery on the New York Mercantile Exchange fell $2.54 to $58.51 a barrel in midday trading, a 4.2 percent drop from Friday's settlement price.
Forecasters are saying the warmer-than-normal temperatures in the Northeast United States _ the biggest heating oil-consuming region _ will continue through January. "That's going to put heating oil distributors around the country in pretty bad shape," said Mike Fitzpatrick, a vice president for energy risk management at Fimat USA.
Traders were pulling down prices near the low levels they reached late last year: "If those are breached, they can fall a long way," Fitzpatrick said. On Nov. 17, the crude contract had closed at $55.81 a barrel, the lowest settlement since June 15, 2005.
The front-month crude contract finished 2006 at $61.05 a barrel _ a penny above where it ended a year earlier. This year's mild winter has arrived against a backdrop of ample global crude inventories, slowing economic growth in the United States, and a production spurt from non-OPEC countries.