Crude oil closes above US$103 a barrel, driven by winter demand, supply concerns
The price of oil rose above US$103 a barrel Wednesday, driven by severe winter weather in the U.S. and supply concerns.
Benchmark West Texas Intermediate crude for March delivery rose 88 cents to US$103.31 a barrel ion the New York Mercantile Exchange after surging $2.13 on Tuesday. The more heavily traded April contract was up 74 cents at US$102.84 a barrel.
The last time the price of oil was above $103 was in October.
Severely cold weather and snowstorms in the eastern U.S. have boosted energy prices. The National Weather Service said more snow is ahead for residents of northern New England, one day after a storm dumped about 30 centimetres on many communities.
One half of U.S. households use natural gas as their primary heating fuel and about a quarter of households in the Northeast U.S. rely on heating oil, according to the Energy Information Administration.
Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ended Feb. 14 is expected to show a build of 1.9 million barrels in crude oil stocks and a draw of 1.3 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos. Distillate stocks, which include diesel and heating fuels, are seen falling two million barrels.
A report from the U.S. Energy Information Administration â€” the industry benchmark â€” will be out on Thursday.
Meanwhile, expectations for an increase in oil supplies were dampened after Iran rejected a key demand of six world powers in their latest round of talks in Vienna aiming to finalize a deal to control Tehran's nuclear program. Iran, a major oil producer, will be able to export more crude if the talks lead to reduced sanctions.
Protests in Venezuela, one of the top five crude suppliers to the U.S., and snags in oil production in Libya and South Sudan also helped increase prices.
In other markets, Brent crude for April, a benchmark for international oils, edged up one cent to US$110.47 a barrel on the ICE Futures exchange in London.
Elsewhere on the Nymex, wholesale gasoline for April slipped 0.39 of a cent to US$2.9968 a U.S. gallon (3.79 litres), heating oil for April rose 2.7 cents to US$3.0726 a gallon and natural gas for April gained 19.7 cents to $4.95 per 1,000 cubic feet.
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