Oil prices rise in advance of US report on inventories
Oil prices rose yesterday, the first increase in four days, ahead of a US Department of Energy report that is likely to show a dip in US petroleum inventories.
Light sweet crude for January delivery rose 64 cents to settle at $57.98 a barrel on the New York Mercantile Exchange.
February Brent crude futures on London's ICE Futures exchange rose 6 cents to settle at $56.17 a barrel.
Weather forecasting service AccuWeather said temperatures in the Eastern United States in the coming days will be milder compared with the previous two weeks, which is likely to ease crude and heating oil demand.
Heating oil is the primary fuel used to warm homes in the Northeast, which consumes about 80 percent of heating fuel in the country.
The Department of Energy releases its midweek petroleum data snapshot today that analysts say will show a decline in crude and distillate stocks from two weeks of snowstorms and cold in the Northeast.
Heating oil futures rose 1.7 cent to $1.7203 a gallon. Gasoline futures declined 1.81 cents to $1.5088 a gallon and natural gas rose 3.7 cents to $14.08 per 1,000 cubic feet.
With the official start of winter today, analysts are warning of a possible spike in demand if the weather turns nasty in the new year.
If ''we observe a colder than average winter in the first quarter of 2006, oil demand will be boosted by 0.3 million barrels per day," said the London-based Center for Global Energy Studies, or CGES, in its December report.
The CGES said US refinery shutdowns from hurricanes Katrina and Rita, which caused a spike in imports from Europe, could cause problems during peak season.
''The massive shutdown of US Gulf Coast refineries helped to keep European plants running," said CGES. ''This meant that turnarounds scheduled for early in this quarter had to be delayed into next year, raising the likelihood of unplanned closures during the peak winter demand period."
Markets are fixated on weather-related patterns in the United States, as a cold snap could bolster demand for fuels when global supply is stretched thin.
