Feb. 3 (Bloomberg) -- Crude oil futures fell to a three-week low after a report showed U.S. gasoline supplies unexpectedly jumped last week and forecasts of mild weather eased concerns that winter heating supplies would fall short of demand.

Gasoline inventories rose for the 10th week in 11, and on Jan. 28 were 5 percent higher than a year earlier, according to a U.S. Energy Department report yesterday. Temperatures in the northeast and much of the central U.S. will be above normal in the first half of February, the National Weather Service said.

``We could see a little bit lower crude prices in the coming weeks with the mild weather forecast in the U.S.,'' said Herwin Schonewille, a trader with Fortis Bank NV in Brussels. ``There is a pressure on heating oil market,'' as refineries start to switch to gasoline and ``it seems there is lot of gasoline in stockpiles.''

Brent crude oil for March delivery fell 9 cents, or 0.2 percent, to $43.92 a barrel at 9:05 a.m. on the International Petroleum Exchange in London.

Gasoline supplies rose by 1.6 million barrels last week, the Energy Department's report said. A decline of 700,000 barrels had been expected, according to the median of 13 analyst forecasts complied by Bloomberg. Supplies of heating oil, diesel and other distillates fell by 2.9 million barrels to 118.6 million barrels, more than the 2.3 million-barrel drop analysts expected.

Supplies

Crude-oil stockpiles fell 324,000 barrels to 295.3 million, leaving supplies 12 percent higher than a year earlier, the report showed. The U.S. added 1 million barrels of crude oil to the Strategic Petroleum Reserve. Oil in the reserve isn't included in the inventory total.

``The U.S. weekly data follows the pattern of recent weeks, with heating oil inventories continuing their descent,'' Kevin Norrish, an analyst at Barclays Capital in London, said in a report. ``The level of total U.S. oil demand is showing a robust 1.6 percent year-on-year increase in January, despite the mild weather in the first half of the month.''

U.S. crude imports fell 5.5 percent to 9.9 million barrels.

Refineries operated at 91.6 percent of capacity, a 0.6 percentage point rise from the week before. U.S. refineries usually shut units for maintenance in January. Analysts surveyed by Bloomberg expected a 0.5 percentage point decline.

Heating demand in the U.S. Northeast, where 80 percent of the country's heating oil is consumed, will be 26 percent below normal between Feb. 3 and Feb. 9, according to Belton, Missouri- based Weather Derivatives Inc.

Cold arctic wind over Alaska will affect the continental U.S. only briefly from time to time, the Weather Service said in a 30-day outlook prepared Jan. 31.

``The northeastern and much of the central U.S. will be milder than normal'' during the first two weeks of February, the service said on its Web site.

OPEC Production

The Organization of Petroleum Exporting Countries, which pumps more than a third of the world's oil, scrapped its price band of $22-$28 established in 2000 at its meeting on Jan. 30 and agreed to review it at its March 16 meeting in Isfahan, Iran. It will also decide on output for the second quarter, when heating demand typically wanes in the Northern Hemisphere.

OPEC may boost output in the second quarter as prices rise and demand increases from last year, Sheikh Ahmad Fahd al-Ahmad al-Sabah, the group's president, said on Jan. 30.

Production by OPEC countries fell for a third month in January, according to a Bloomberg survey. Daily production by all 11 OPEC members fell 1.2 percent to an average of 29.44 million barrels, according to the survey of oil companies, producers and analysts.

``The fundamentals are still very, very tight,'' said Sam Dale, an analyst at Energy Intelligence Group. ``There is a concern about what OPEC is going to do. They have proved that they are going to keep the market on its toes.''

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

Last Updated: February 3, 2005 04:20 EST