Oil prices climbed in Asian trade on Wednesday as freezing weather continued to grip the northeastern US, a key market for heating fuel, dealers said. New York's main oil futures contract, light sweet crude for delivery in March, was up 48 cents to $59.36 a barrel from $58.88 in late US trades.
Brent North Sea crude for March added 44 cents to $58.86. Tony Nunan, the Tokyo-based manager of energy risk at Mitsubishi Corporation, said cold winter weather in the US Northeast was the main driver for rising oil prices. "The cold weather looks like it is going to at least last until next week. We went from mild weather to unusually cold weather from mid-January onwards and this is increasing demand for heating oil," Nunan added. US demand for heating fuel is expected to be about 20% above normal this week.
Nunan said the rise is also driven by investors who feel oil prices have bottomed out after hitting lows of under $50 in January. "The market expects weekly department of energy inventory data to show a fall in distillates inventories, which include heating oil, due to strong demand. There's a feeling there is going to be a big draw in distillates ... The average expectation is about three million barrels," Nunan said.
Brent North Sea crude for March added 44 cents to $58.86. Tony Nunan, the Tokyo-based manager of energy risk at Mitsubishi Corporation, said cold winter weather in the US Northeast was the main driver for rising oil prices. "The cold weather looks like it is going to at least last until next week. We went from mild weather to unusually cold weather from mid-January onwards and this is increasing demand for heating oil," Nunan added. US demand for heating fuel is expected to be about 20% above normal this week.
Nunan said the rise is also driven by investors who feel oil prices have bottomed out after hitting lows of under $50 in January. "The market expects weekly department of energy inventory data to show a fall in distillates inventories, which include heating oil, due to strong demand. There's a feeling there is going to be a big draw in distillates ... The average expectation is about three million barrels," Nunan said.
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