Alexa

Oil futures end higher on Mideast concerns, US cold weather

Oil futures end higher on Mideast concerns, US cold weather

Crude oil futures edged higher Monday on strong oil product prices after climbing close to $100 a barrel earlier in the session.
Light, sweet crude for April delivery gained 42 cents to settle at $99.23 a barrel on the New York Mercantile Exchange. It climbed as high as $99.70 a barrel earlier on supply concerns heightened by a Turkish military incursion into northern Iraq and warnings by Iran against further international sanctions
Some analysts noted that some investors had invested heavily in crude, betting that prices will continue to rise, and that this was likely to contribute to volatility in the market.
In London, April Brent crude futures rose 68 cents to finish at $97.69 a barrel on the ICE Futures exchange.
In other Nymex trading, heating oil futures 2.23 cents to settle at $2.7853 a gallon, while natural gas futures rose 4 cents to $9.186 per 1,000 cubic feet.
Over the last few trading sessions, threats to oil supplies in producing nations have been balanced by expectations of lower demand due to the slowing U.S. economy. Small developments on both sides of that equation sent the market higher and lower throughout the day.
Record heating oil prices brought on by cold weather across the U.S. Midwest and Northeast helped explain why futures ended higher on Monday, said Tim Evans, an analyst with Citigroup in New York.
"The main features here are a little bit more heating oil demand than expected ... (due to) colder-than-normal temperatures," Evans told Dow Jones Newswires, adding that the market is "pricing in a supply disruption of some sort that we don't have."
Meanwhile, U.S. gasoline prices at the pump added more than 2 cents over the weekend, topping a more than eight-month high reached Friday.
Retail gas prices rose 2.2 cents to a national average of $3.137 a gallon from $3.115 Friday, the highest since June 8, according to AAA and the Oil Price Information Service. Gasoline futures also rose less than a penny to settle at $2.5419 a gallon.
Many analysts believe gas prices could climb to record highs between $3.75 and $4 a gallon this spring. The Energy Department's latest forecast calls for gas prices to peak near $3.40 a gallon this spring.
But most say the run-up is only in response to oil's recent spike to a new record above $101 a barrel.
"We've just about caught up with the wholesale surge. There's always lag between wholesale and retail," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, New Jersey. "This is a little bit of a false start to a rally that has more to do with oil and not as much with gasoline."
Other analysts also point to inventory levels at a 14-year high that won't support these prices for long.
"We have record high prices, but we don't have record tight inventories," said Tim Evans, an energy analyst at Citigroup Global Markets. "The gasoline market is not physically in bull market territory. Whether traders acknowledge this or not, these are bear market conditions."
Evans pointed out that gas supplies have risen for 15 straight weeks.
"To some extent this is what happens in winter because seasonally demand tends to be weak. But demand has been weaker than a year ago, which has allowed inventories to accumulate at a faster rate," he said.
___
Dow Jones Newswires contributed to this report.


Updated : 2021-03-08 18:36 GMT+08:00