World crude oil prices rose on Monday as traders worried about heating oil supplies in anticipation of a plunge in temperatures in the northeastern United States.
New York’s main contract, light sweet crude for delivery in January, climbed 30 cents to $41,01 a barrel.
Brent North Sea crude rose 46 cents to $37,84.
The market halted a dramatic slide since the start of December, in which the New York light sweet crude contract had crumbled 17,1% and Brent North Sea crude had tumbled 17,9%.
”Crude rose in the wake of the heating oil,” said Refco market analyst Marshall Steeves. ”We are expecting some freezing temperatures in the northeast,” he said.
The United States National Weather Service on Monday forecast that from Saturday the country’s eastern and northeastern regions would suffer lower-than-average temperatures for the time of year.
The northeast region burns 80% of the United States’ total heating oil consumption.
Signs that the Organisation of Petroleum Exporting Countries had begun to implement a decision to rein in overproduction by one million barrels per day also supported prices, analysts said.
”Prices are up with participants realising that Opec are serious about reining in on over-production, with the quick implementation of new policy,” Washington-based PFC Energy analyst Seth Kleinman said.
Opec left its official output quota of 27-million barrels per day unchanged at a meeting in Cairo on Friday.
But cartel members agreed to scale back surplus crude oil production to try to regain control of the market after pumping close to full capacity for months.
The 11-member cartel agreed to trim output by one million barrels per day from January 1 to try to halt a drop in crude prices from all-time highs above $55 a barrel in New York during October.
Refco’s Steeves said he believed it would still take time for Opec to carry out the output cut.
Traders widely expected a rise in weekly US commercial petroleum inventories when the data are released on Wednesday, he added. – Sapa-AFP