SINGAPORE, AP -Forecasts that a winter storm will hit the northeastern United States during the busy Thanksgiving weekend lifted crude oil futures Tuesday amid analysts” predictions that prices would likely rise in coming weeks as demand for heating oil grows.
Light, sweet crude for January on the New York Mercantile Exchange rose 20 cents to $57.80 a barrel mid-afternoon in Singapore, a day after leaping 49 cents to close at $57.70 in floor trade.
While prices are around $13 lower than the all-time high of $70.85 Aug. 30, they remain around 20 higher compared to a year ago.
January Brent on London”s ICE Futures exchange rose 33 cents to $55.67 a barrel.
In recent weeks, oil prices have been largely dictated by weather patterns in the northeastern U.S., which consumes about three-quarters of the country”s heating oil, making it the world”s biggest market for that type of fuel.
Unusually mild weather in that region in early November depressed prices, but now that winter is setting in, analysts are already saying crude has bottomed out after hitting a five-month low last week.
"With another blast of cold weather headed to us this week we may have seen the lows," said Phil Flynn, an analyst with Alaron Trading Corp. in Chicago.
Forecasts from AccuWeather predicted snow in New York City and Philadelphia on Thanksgiving Day, adding that "extreme cold" is expected in Ohio, New England and cities surrounding the Great Lakes.
For further clues on the direction of oil prices, the market also was awaiting the release of weekly U.S. petroleum inventory data on Wednesday.
A Dow Jones Newswires survey of analysts was mixed, with five predicting crude stocks increases with four others saying there would be a fall. Distillate stocks, which include heating oil, jet fuel and diesel, are likely to rise, the analysts said.
The London-based Center for Global Energy Studies warned of low distillate stocks in the United States after production was battered from Hurricanes Katrina and Rita at a critical time before refineries normally begin boosting output before winter.
"Distillate output has suffered most from the refinery shutdowns, falling by 600,000 barrels per day from peak summer levels," CGES said. "Imports have only made small inroads upon this supply gap…Stocks are now close to the bottom of the seasonal range."
In other Nymex prices, heating oil rose a cent to $1.7200 a barrel, natural gas was up 3.4 cents to $11.365 per 1,000 cubic feet while gasoline moved up 1.27 cents to $1.4700 a gallon.