The price of oil rose to near $94 a barrel Tuesday as unusually cold weather in the U.S. was expected to fuel demand in the world's largest market for energy.
By mid-afternoon in Europe, benchmark U.S. oil for February delivery was up 42 cents to $93.85 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract fell 53 cents to settle at $93.43 a barrel.
Crude prices were bolstered by the cold wave in the U.S., the world's top oil consumer, as consumption of heating oil is expected to surge.Dangerously cold polar air snapped decades-old records, spreading Tuesday from the Midwest to southern and eastern parts of the U.S. and eastern Canada. Many cities came to a virtual standstill, with flights cancelled and schools and businesses shuttered due to the severe cold.
Forecasters said some 187 million
people could feel the effects of the "polar vortex" by the time it
spreads across the country.
Prices were also supported by
continuing uncertainty about Libya's crude exports. Nearly three years after
the start of the civil war that ousted Moammar Gadhafi, strikes and protests in
the oil industry and conflicts between the government and regional militias
have kept output at a fraction of its earlier level of around 1.5 million barrels
However, even with the uncertainty in
Libya, Iraq and other key oil producers, global supplies are expected to remain
ample, keeping crude prices under pressure.
"Despite these troubles, the
supply outlook is robust," said the Kilduff Report edited by Michael
Fitzpatrick. "A test of $92 will likely occur this week, with more losses
Brent crude, used to set prices for
international varieties of crude, was up 47 cents to $107.20 on the ICE Futures
exchange in London.
In other energy futures trading:
- Wholesale gasoline rose 2.28 cents
to $2.6688 a gallon.
- Natural gas added 6.8 cents to
$4.374 per 1,000 cubic feet.
- Heating oil was up 1.25 cents to
$2.9513 a gallon.