Chevron Corp., the No. 2 U.S. oil company, reported on Tuesday that its fourth-quarter oil and gas production fell both in the United States and internationally, and it said it expects results in the quarter to be hurt by lower commodity prices.

The company said U.S. liquids and natural gas production fell almost 1 percent from the third quarter as planned project activity in the Gulf of Mexico continued into December.

Combined international liquids and natural gas production volumes were down 3.4 percent from the previous quarter.

Chevron said production volumes reflect the impact of a change in its service agreement with Venezuela's state oil company, which is estimated to reduce volumes by about 90,000 barrels per day.

U.S. crude realizations decreased by $11.72 per barrel, in line with the decrease in the price of West Texas Intermediate crude and California heavy crude, while international liquids realizations fell $11.05 per barrel, in line with the decrease in Brent spot prices.

Chevron said. U.S. natural gas realizations fell by 51 cents per thousand cubic feet.

Chevron said it expects fourth-quarter results to be at or above the high end of its standard forecast for net after-tax charges for corporate and other activities of between $160 million and $200 million.

Crude oil fell to the lowest in a year and a half as mild weather in the eastern U.S. curbed heating- fuel consumption, causing stockpiles to increase.

Temperatures in New York will rise to 48 degrees Fahrenheit (9 Celsius) today, 10 degrees above the normal high, the National Weather Service said. The city had its third-warmest December on record. OPEC will speed up a 500,000 barrel-a-day output cut by almost a month to stop the fall in oil prices, Qatar's oil minister said.

``It's hard to be worried about heating-oil supplies when we've seen 60-degree weather this January,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. ``Refiners are shifting to gasoline production, which should leave us with ample supplies when demand picks up. Demand for crude oil should fall as the product stockpiles grow.''

Crude oil for February delivery fell $1.37, or 2.4 percent, to $54.72 a barrel at 10:21 a.m. on the New York Mercantile Exchange. Futures touched $53.88, the lowest since June 13, 2005, prior to Hurricane Katrina, which destroyed oil platforms and refineries along the U.S. Gulf of Mexico coast. Prices are down 10 percent this year and 14 percent from a year ago.

Crude oil rose for a second day on speculation that falling temperatures in the U.S. may boost heating demand in the world's largest energy consumer and as Russian supplies to Poland and Germany were curtailed.

Up to six inches of snow may fall today in parts of the U.S. Northeast, where four-fifths of the country's heating oil is burned, according to forecasting service Accuweather.com. Russian crude oil deliveries to Poland and Germany along a million barrel- a-day pipeline were halted following a dispute between Russia and Belarus, according to the Polish pipeline operator.

``The weather is the main driver of the market now,'' said Gerrit Zambo, an oil trader at BayernLB in Munich. ``Even small signs of cooler temperatures can bring prices back up toward the $60 a barrel region.''

Crude oil for February delivery rose as much as $1.41, or 2.5 percent, to $57.72 a barrel on the New York Mercantile Exchange and traded at $57.46 at 2:41 p.m. London time. Brent crude oil gained $1.35 to $56.99 a barrel on the London-based ICE Futures exchange.

Polish pipeline operator PERN Przyjazn SA and Grupa Lotos SA, Poland's second-largest refiner, said supplies via the Druzhba pipeline that transports Russian crude through Belarus were cut off last night. The Polish segment of the pipeline carries about 50 million tons of oil a year, including 27 million tons to German refiners.

U.S. Weather

Temperatures may drop below normal in the western U.S. this week and cooler weather will spread across most of the country until Jan. 20, according to the National Weather Service.

New York-traded crude rose 72 cents, or 1.3 percent, to $56.31 a barrel on Jan. 5 after dropping almost 9 percent the previous two sessions. Prices fell last week amid mild weather in the U.S. Northeast and after U.S. fuel inventories climbed more than expected.

Last week's price decline was the biggest since April 2005. The price of oil has plunged about 27 percent from the record $78.40 a barrel reached July 14 after Israeli forces invaded Lebanon to fight Hezbollah militants.

``The next move is likely to be back up again,'' said Adam Sieminski, chief energy economist at Deutsche Bank AG in New York. ``There could be rising hysteria in OPEC because a number of the countries like Iran and Venezuela have been spending like oil was going to stay at $70 a barrel.''

The Organization of Petroleum Exporting Countries agreed to cut output by 1.2 million barrels a day in November, citing slower-than-forecast demand growth and rising global stockpiles. Members agreed in December to cut another 500,000 barrels a day starting Feb. 1.

Working gas in storage was 3,074 Bcf as of Friday, December 29, 2006, according to EIA estimates. This represents a net decline of 47 Bcf from the previous week. Stocks were 433 Bcf higher than last year at this time and 408 Bcf above the 5-year average of 2,666 Bcf. In the East Region, stocks were 201 Bcf above the 5-year average following net withdrawals of 33 Bcf. Stocks in the Producing Region were 170 Bcf above the 5-year average of 772 Bcf after a net withdrawal of 5 Bcf. Stocks in the West Region were 37 Bcf above the 5-year average after a net drawdown of 9 Bcf. At 3,074 Bcf, total working gas is above the 5-year historical range.

Oil prices plunged below $59 a barrel Wednesday as mild weather persisted in the United States, dampening demand for winter fuels such as heating oil and natural gas.

Light, sweet crude for February delivery on the New York Mercantile Exchange fell to $58.97 a barrel in midmorning trading, a drop of $2.08 from Friday's settlement price.

The Nymex trading floor was closed Monday for New Year's Day and Tuesday for the memorial service for former U.S. President Gerald Ford, although there was some electronic trading.

The Brent crude contract for February delivery fell $1.58 to $60.05 a barrel on the ICE Futures exchange, which was open on Tuesday.

In New York City, temperatures on the first day of 2007 hit a peak of 54 degrees Fahrenheit _ much warmer than normal.

But many analysts expect crude oil futures to stay on average above $60 a barrel this year because of robust demand growth in Asia and the Middle East, efforts by the Organization of Petroleum Exporting Countries to trim supply and market-rattling instability in suppliers such as Nigeria and Iraq.

OPEC's concerns that high global stockpiles and sluggish demand would undermine prices led it to agree on a 1.2 million barrel-a-day crude oil output cut in November and a further 500,000 barrel-a-day cut to take place Feb. 1.

"For 2007, oil pricing is likely going to be stubbornly high, with the OPEC group looking like it will want to defend a $55 floor under prices," said Victor Shum, an analyst with Purvin & Gertz in Singapore. He projected crude futures would trade in the $60-65 a barrel range. "With ongoing geopolitical concerns such as Iran and Nigeria, the market will also tend to have buyers on the high side."

Slower economic growth in the U.S. and a production spurt from non-OPEC countries should keep prices below the 2006 average of roughly $66 a barrel, analysts say.

A survey of energy analysts showed U.S. crude oil stocks were expected to decline for a fifth straight week in data due Thursday from the U.S. Energy Information Administration. The data, which will cover the week ended Dec. 22, have been delayed until Thursday because of the three-day Christmas holiday.

Crude stocks were expected to show a draw of 1.32 million barrels on average, a Dow Jones Newswires survey said, while both distillate and gasoline stocks were predicted to rise.

Distillate stocks, which include heating oil and diesel fuel, are expected to increase by an average of 220,000 barrels while gasoline inventories were seen rising by an average of 590,000 barrels.

Heating oil futures fell 4.72 cents to $1.6010 a gallon, while natural gas prices dropped 11.2 to $6.187 a gallon.