Severe cold in US pushes oil prices above $94 a barrel
The price of oil rose above $94 a barrel on Wednesday, fuelled by US demand amid a deep freeze across much of the country.
The price of oil rose above $94 a barrel on Wednesday ahead of a weekly US stockpile report and with US demand for heating fuel expected to rise amid severe cold weather.
Benchmark US oil for February delivery was up by 39 cents to $94.06 a barrel at mid-afternoon, Kuala Lumpur time, in electronic trading on the New York Mercantile Exchange. The contract was up by 24 cents to close at $93.67 a barrel on Tuesday.
A deep freeze has spread from the US Midwest to the East and South, setting record low temperatures from Boston to Birmingham and killing 21 people. The Midwest and the East experienced temperatures colder than much of Antarctica, supporting oil prices as demand for heating fuel rises.
An estimated 190-million people in the US were subjected to the icy blast, caused by a kink in the "polar vortex", the strong winds that surround the North Pole. Authorities said the worst should be over in the next day or two. Warmer weather – at least near or above freezing – is in the forecast for much of the stricken part of the country.
Analysts said investors are waiting on the US government's latest crude inventory report, which is likely to show a fall in stockpiles last week, indicating stronger demand.
Brent crude, used to set prices for international varieties of crude, was up by 18 cents to $107.53 a barrel.
In other energy futures trading:
- Wholesale gasoline was down by 0.1 cents to $2.678 a gallon.
- Natural gas rose by 3 cents to $4.329 per 1 000 cubic feet.
- Heating oil was up by 0.4 cents to $2.964 a gallon.