SINGAPORE, (AP) – Oil prices rose Thursday as traders moved to recoup some losses from the day before and kept their eyes on geopolitical issues in Nigeria and Iran.
Light, sweet crude for March delivery rose 40 cents to $58.11 a barrel in electronic trading on the New York Mercantile Exchange, midafternoon in Singapore.
Crude prices dropped more than a dollar Wednesday after the U.S. Department of Energy’s weekly inventory report showed lower demand for distillate fuels like heating oil.
“The drop of more than a dollar yesterday was an overreaction to the U.S. inventories report, which was not particularly bearish,” said Victor Shum, an energy analyst with Purvin & Gurtz in Singapore.
Thursday’s recovery and the daily volatility in trading “shows that the market is still solidly in the $56-60 range,” Shum said.
March Brent crude at London’s ICE Futures exchange was up 43 cents to $57.66 a barrel.
Shum said the continued kidnappings in Nigeria and increasing tensions between Iran and the United States over the Iranian nuclear program were “a reminder to the oil market that geopolitical tensions are lurking” but were not strong enough factors to leap above the psychological barrier of $60.
Bitterly cold weather recently in the U.S. Northeast — which represents 80 percent of the nation’s heating oil demand — has helped lift oil prices 19 percent since Jan. 18, when crude touched a 20-month low of $49.90.
The National Oceanic and Atmospheric Administration continues to forecast below-normal temperatures across the Northeast until at least Feb. 19.
Traders have not sent prices above $60 a barrel since the first trading day of the year.
In other Nymex trading Thursday, heating oil rose 0.95 cent to $1.6756 a gallon, and natural gas prices dropped 1.7 cent to $7.692 per 1,000 cubic feet.