Oil steadies at $ 58, support from refinery woes

Singapore, Feb 16: Oil prices were steady near on Friday, supported by cold U.S. weather and North American refinery troubles.

U.S. crude for March delivery was 5 cents higher at .04 a barrel by 0400 GMT, after closing 1 cent lower in New York on Thursday. London Brent crude for April was down 3 cents at .57.

''The market is still very much driven by short-term factors like the U.S. winter. It's very short sighted at the moment as the winter won't last for more than the next few weeks,'' said Tetsu Emori, chief commodities strategist at Tokyo's Mitsui Bussan Futures.

A mild winter pressured oil prices to a 20-month low of .90 a barrel on Jan. 18, as it curbed heating oil demand in the United States, the world's top consumer. Prices rebounded to above only when the winter turned cold this month.

U.S. distillate stocks, including heating oil, fell by 3 million barrels last week, U.S. government data showed, but less than the 4.2 million barrel draw forecast by analysts. S] A fire at the crude distillation unit (CDU) at Imperial Oil Ltd.'s 118,000 barrel per day (bpd) refinery in Nanticoke, Ontario, lent support to prices.

The company said production had been affected, although the amount of lost output was not known yet.

A bomb scare at BP's Texas refinery, the third largest in the U.S. with a rated crude processing capacity of 460,000 bpd, led to maintenance work being disrupted as workers were evacuated, although production was unaffected.

The facility had has been operating at no more than half its capacity as repairs are being made to equipment damaged in the shutdown of the plant due to damage caused by Hurricane Rita in September 2005.

Demand for OPEC oil in 2007 will average 30.25 million barrels per day, up from the 30.09 million bpd previously forecast, the 12-member cartel said in its Monthly Oil Market Report for February.

The higher demand is due mainly to lower production levels from non-member countries, which OPEC expects to average 50.7 million bpd this year, up 1.2 million bpd from 2006 but a reduction of 170,000 bpd from the previous estimate.

However, OPEC warned that it may cut its growth forecast for world demand this year from 1.2 million bpd if the exceptionally mild temperatures in the northern hemisphere seen earlier this year recur.

Reuters