The price of oil rose to near US$94 a barrel Tuesday as unusually cold weather in the U.S. was expected to fuel demand in the world’s largest market for energy.
Benchmark West Texas Intermediate crude for February delivery rose 24 cents to US$93.67 a barrel on the New York Mercantil Exchange. On Monday, the contract fell 53 cents to settle at US$93.43 a barrel.
Crude prices were bolstered by a cold snap in the U.S., the world’s top oil consumer, as the use of heating oil was expected to surge.
Dangerously cold polar air broke decades-old records, spreading Tuesday from the Midwest to southern and eastern parts of the U.S. and Eastern Canada. Many cities came to a virtual standstill, with flights cancelled and schools and businesses shuttered due to the cold.
Forecasters said some 187 million people could feel the effects of the “polar vortex” by the time it spreads across the country.
Prices were also supported by continuing uncertainty about Libya’s crude exports. Nearly three years after the start of the civil war that ousted Moammar Gadhafi, strikes and protests in the oil industry and conflicts between the government and regional militias have kept output at a fraction of its earlier level of around 1.5 million barrels a day.
However, even with the uncertainty in Libya, Iraq and other key oil producers, global supplies are expected to remain ample and keep crude prices under pressure.
“Despite these troubles, the supply outlook is robust,” said the Kilduff Report edited by Michael Fitzpatrick. “A test of $92 will likely occur this week, with more losses to follow.”
Brent crude, used to set prices for international varieties of crude, was up 62 cents at US$107.35 a barrel.
In other energy futures trading: wholesale gasoline rose 3.26 cents to US$2.678 a U.S. gallon (3.79 litres), heating oil was up 2.05 cents at US$2.959 a gallon and natural gas fell nearly a cent to US$4.30 per 1,000 cubic feet.
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