LONDON (AP) - Oil prices fell for a second day on Thursday as traders awaited the release of U.S. inventory data expected to show the first increase in crude-oil stocks in six weeks. Light, sweet crude for February delivery was down $1.27 to $57.05 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Europe, after dipping as low as $56.86. On Wednesday, the contract plunged $2.73 to $58.32 a barrel, the biggest one-day drop since Aug. 17, 2005.
Brent crude for February delivery fell $1.27 to $56.69 a barrel on the ICE Futures exchange in London.
"The slide in crude oil prices has been accelerated by the release of comments from the U.S. Fed meeting on Dec. 12 which highlight concerns over the U.S. economy," said Peter Beutel, an analyst at Cameron Hanover.
A slowdown in the economy would tend to depress demand for oil, and thus leads to lower prices.
Unusually warm winter weather in the U.S. has held oil prices down in recent weeks. The U.S. National Weather Service said above-normal temperatures were likely to continue in the northeast at least through mid-January.
Weather has played an increasingly important role in oil prices in recent years. Prices surged to $70 a barrel for the first time in 2005 as Hurricane Katrina ravaged the U.S. Gulf Coast.
"For now, it still appears the weather outlook will continue to be the focal point for the energy complex," Mike Fitzpatrick, vice president for energy risk management at Fimat USA, said in his daily note to clients.
The U.S. Energy Information Administration's weekly fuel inventories report to be released Thursday, a day later than usual due to the New Year's holiday, is expected to show U.S. crude stocks rose by 930,000 barrels in the week ending Dec. 29, the first time in six weeks, according to a survey of energy analysts by Dow Jones Newswires.
Crude stocks declined more than 20 million barrels in the five weeks ending Dec. 22 as refiners stepped up production ahead of winter and heavy fog in the Houston and Louisiana ship channels caused shipping delays.
Petroleum product stocks are seen rising partly due to sluggish winter demand. Distillate stocks, which include heating oil and diesel fuel, are expected to increase by an average of 1.15 million barrels, while gasoline stocks are forecast to rise by an average of 1 million barrels.
Heating oil futures fell 1 cent to $1.5778 a gallon on the Nymex, while natural gas prices rose 12.2 cents to $6.285 per 1,000 cubic feet.
