The price of oil recovered slightly to above $94 a barrel Monday amid cold weather in the U.S. and as some investors sought bargains following a weeklong market plunge.
By early afternoon in Europe, benchmark U.S. oil contract for February delivery was up 38 cents to $94.34 in electronic trading on the New York Mercantile Exchange. On Friday, the contract fell $1.48, leaving it 6.4 percent lower over the past week.Crude prices were supported by the cold weather in the U.S. and the advance of al-Qaida militants in the western Iraqi cities of Fallujah and Ramadi, setting the stage for confrontations with government troops and increasing the risk of interruptions to oil exports.
"The fundamental focus at the
start of the week is on the extreme cold in the U.S.," said Olivier Jakob
of Petromatrix in Switzerland. "End consumer demand must have been ...
very strong and that will make the U.S. at risk to any second cold wave as both
the stocks of natural gas and heating oil are on the low side."
Still, analysts said there risks oil
prices might fall further -- energy demand has not been rising as fast as
expected, while supplies have been sufficient.
Also, a rising dollar could dent oil
prices. The Fed recently began winding down its stimulus program, which is
boosting the value of the dollar and leading investors away from oil. A
stronger dollar makes commodities such as oil that are priced in dollars more
expensive for buyers using other currencies.
Brent crude, used to price
international crude processed by many U.S. refineries, was up 91 cents to
$107.80 on the ICE Futures exchange in London.
Brent's gains came despite reports
last week that protests ended at one of Libya's largest oil fields, which could
allow the field to restart production and deliver more than 300,000 barrels of
daily production to the global market.
Traders, however, consider that news
on Libya's recovering oil industry needs to be evaluated with caution, as the
situation in the northern African country is still unpredictable nearly three
years after the start of its 2011 civil war.
In other energy futures trading:
- Wholesale gasoline rose 2.2 cents to
$2.6708 a gallon.
- Natural gas added 4 cents to $4.344
per 1,000 cubic feet.
- Heating oil was up 4.12 cents to
$2.9806 a gallon.