Oct. 30 (Bloomberg) -- Crude oil fell as traders speculated that U.S. fuel inventories rose last week because a major port reopened to tanker deliveries and as forecasters predicted warmer- than-normal winter temperatures in much of the country.

U.S. crude inventories declined the most since July in the week to Oct. 20 because the Louisiana Offshore Oil Port closed temporarily earlier this month, delaying tankers. The port has reopened. Milder weather may lower demand for heating, causing further increases in U.S. stockpiles, which are already larger than average.

``The stockpiles statistics will be bearish,'' said Christopher Bellew, an oil broker with Bache Financial Ltd. in London. ``The stocks will rise. With the milder weather, the prices may come down this week.''

Crude oil for December delivery fell as much as $1.25, or 2.1 percent, to $59.50 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $59.70 at 2:18 p.m. in London. Brent crude for December settlement declined $1.30 to $59.78 a barrel on London's ICE Futures Exchange.

U.S. crude supplies fell 3.21 million barrels, the Energy Department said last week. The next report is Nov. 1.

Demand for fuel in the U.S., the world's largest consumer of energy, may diminish because of slowing economic expansion, analysts said. The nation's economy grew at a 1.6 percent annual rate last quarter, the slowest pace in more than three years, the Commerce Department reported last week.

Net Shorts Increase

Hedge-fund managers and other large speculators increased their net-short position in New York crude-oil futures in the week ended Oct. 24, according to U.S. Commodity Futures Trading Commission data. Speculative short positions, or bets prices will fall, outnumbered long positions by 5,025 contracts on the New York Mercantile Exchange.

``Fund selling has swept the market,'' said Kevin Blemkin, a broker with Man Group Plc in London.

Crude oil prices have fallen about $18 from a record high of $78.40 a barrel in New York on July 14 because of higher fuel inventories and the end of the U.S. summer vacation season.

The oil price decline led the Organization of Petroleum Exporting Countries, which produces about 40 percent of the world's crude, to agree to cut output by 1.2 million barrels a day starting Nov. 1.

OPEC Action

``We have to wait a little bit to see how the quota measures will be respected'' by OPEC nations, said Thierry LeFrancois, an energy analyst with Natexis Bleichroeder SA in Paris. ``It's not excluded that OPEC will decide on a supplemental cut. It all depends on the vigor of consumption.''

The OPEC crude oil basket price fell 59 cents to $55.53 a barrel on Oct. 27, the latest available data. The daily price index is a weighted average of 11 crude blends produced by OPEC nations.

``It is not ruled out that a new reduction can be decided at the meeting that OPEC will hold in Abuja, Nigeria, in December, if the instability continues in the international oil market,'' said Shokri Ghanem, chairman of Libya's state-run National Oil Corp., in a report on the company's Web site.

National Oil will reduce pumping by 72,000 barrels a day as of Nov. 1, according to Ghanem. Libya, the eighth-largest member of OPEC, produced 1.7 million barrels a day in September, according to Bloomberg estimates.

People ``who are expecting global economic weakness, strong non-OPEC supply and weak OPEC cohesion are unlikely to change those core views in a hurry,'' analysts at Barclays Capital in London, including Kevin Norrish and Sudakshina Unnikrishnan, wrote today in a report. ``The dominant speculative sentiment remains overwhelmingly bearish.''

U.S. Weather

U.S. temperatures will average higher than normal across all regions this winter except in the Northeast, where colder-than- average conditions will dominate, Andover, Massachusetts-based WSI Corp. said Oct. 23.

December and January, when demand for heating fuel rises, will bring below-average temperatures to the Northeast, the forecaster said. Other areas will have milder-than-normal weather during those months. The Northeast and northern Midwest will have warmer-than-normal temperatures in November.

``I don't expect any big moves this week, rather sideways around $60,'' said Jakob Schoechli, an oil analyst at Bank Leu AG in Zurich. ``We see the range $55 to $65 through this year.''

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: October 30, 2006 09:19 EST