LONDON – The warmer December weather on the U.S. East Coast has cooled crude oil prices, which dipped below $63 per barrel in trading yesterday.

Meanwhile, on Monday, OPEC reported that fundamentals of the world oil market showed signs of weakening in 2007 as economic growth slows and supply from non-OPEC countries rises faster than global demand. “Risks for oil demand appear to be more weighed to the downside, given the dangers to global economic growth emanating from a visibly weakening U.S. economy,” OPEC said in its monthly report, according to Reuters.

OPEC economists expect producers from outside the group to produce 1.8 million barrels per day more crude in 2007. If that happens, it would be the fastest, non-OPEC growth for 20 years and would decrease demand for OPEC oil.

The continuing mild weather has put a crimp on heating fuel demand in the United States, with temperatures in the Northeast expected to stay above average at least until the end of the week, according to private forecaster DTN Meteorlogix. The limited demand has kept crude inventories relatively high for this time of year.

"I think the market is focused on inventories at the moment," David Dugdale at MFC Global Investment Management told Reuters. "And the overall picture is one of fairly comfortable inventories and strong non-OPEC production coming on stream. And against this background we have softening demand, so the market is justified in coming in."

Last week, OPEC voted to make a second output cut of 500,000 barrels per day, to start from February, to prevent stockpiles from rising again after winter.