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Winter blast in U.S. lifts oil prices above US$52 a barrel

Winter blast in U.S. lifts oil prices above US$52 a barrel

Oil prices rose Monday following a blast of winter in the United States, the world's largest heating oil market.
An unusually warm winter in the United States and numbers showing growing crude inventories had dragged oil prices below US$50 a barrel last Thursday.
But over the weekend, snow, sleet and freezing rain hit the U.S. East Coast, and winds up to 60 mph (95 kph) piled snow into drifts as high as 3 feet (90 centimeters) in parts of Colorado, the U.S. National Weather Service said.
"It's the falling temperature in the U.S. Northeast that has prompted market participants to speculate that higher fuel demand will stamp out the high U.S. inventories," said Victor Shum, an analyst with Purvin & Gertz in Singapore.
Light, sweet crude for February delivery rose 51 cents to US$52.50 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. The contract, which rose US$1.51 Friday to settle at US$51.99 a barrel, will expire later Monday.
March Brent crude on London's ICE Futures exchange rose 15 cents to US$53.59 a barrel.
Last week, the U.S. Energy Department reported the biggest increase in crude inventories in more than four years. It said crude oil stockpiles rose by 6.8 million barrels to 321.5 million barrels in the week ended Jan. 12.
"Perhaps the cold weather came a little too late, there aren't too many cold winter weeks left, but it is providing for a little psychological boost," Shum said.
Still, analysts say the downtrend in the price of crude is far from over.
"The rise comes mainly from short-covering. U.S. oil stocks are still high," said Koichi Murakami, an analyst with brokerage Daiichi Shohin in Tokyo.
U.S. inventory figures showed that gasoline stockpiles rose by 3.5 million barrels and distillates, which include heating oil and diesel, rose by 900,000 barrels.
Heating oil futures gained nearly 2 cents to US$1.5310 a gallon on the Nymex while natural gas rose 34 cents to US$7.226 per 1,000 cubic feet.


Updated : 2021-10-26 08:32 GMT+08:00