SINGAPORE, (AP) – Oil prices rose in Asian trading Tuesday, bolstered by expectations that heating fuel demand would jump as arctic weather blasted through parts of the United States, the world’s top energy consumer.
Light, sweet crude for March delivery gained 40 cents to $59.14 a barrel on the New York Mercantile Exchange mid-afternoon in Singapore. The contract on Monday slipped 28 cents to settle at $58.74 a barrel.
Brent crude for March delivery rose 45 cents to $58.55 a barrel on the ICE Futures exchange in London.
“The overall market sentiment is much more bullish now. The cold weather (in the United States) has helped the oil market find a floor and that has brought the investors back in,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
A bone-chilling cold wave blasted across the northern Plains of the United States to the Northeast, contributing to heavy snowfall and shutting down some schools Monday.
Colder-than-normal temperatures are expected to linger in the Northeast and Midwest through Feb. 18, according to the National Weather Service, which could send oil and natural gas prices higher.
“The late winter has helped reduce market concerns about the very-high U.S. inventories of distillate stocks we saw earlier this year when winter was practically nonexistent,” Shum said.
Oil prices had fallen as low as $49.90 a barrel last month after an unseasonably warm January.
Strong winter demand for heating fuels is expected to result in another big drop in U.S. distillate stocks in weekly petroleum inventories data due Wednesday, according to a Dow Jones Newswires survey of energy analysts.
The report by the Energy Information Administration, the U.S. Energy Department’s statistical arm, is expected to show a decline of 2.9 million barrels of distillate stocks, on average.
Jim Ritterbusch, president of consultancy Ritterbusch & Associates in Galena, Illinois, said the recent cold blast in the northeast, the nation’s main heating oil-consuming region, may have boosted demand by as much as 500,000 barrels a day. Last week, the EIA reported a decline of 2.6 million barrels in distillate stocks.
Crude stocks were forecast to rise by 950,000 barrels on average, the survey showed.
Heating oil futures added 0.99 cent to $1.6855 a gallon while natural gas prices rose 11.4 cents to $7.748 per 1,000 cubic feet.