Crude oil futures jumped toward $44 a barrel yesterday as traders appeared to remain concerned about tight supplies of heating oil ahead of the government's next petroleum supply report and as colder weather approached the Northeast.
Light sweet crude for February delivery climbed $1.79 to settle at $43.91 on the New York Mercantile Exchange, as February heating oil futures rose 5.44 cents to $1.2466 per gallon.
In London, Brent crude for February delivery was up 58 cents to $41.04 per barrel on the International Petroleum Exchange.
Marshall Steeves, an analyst at Refco Inc. in New York, said expectations of some colder weather -- and possibly a snowstorm -- in the Northeast may have sparked the buying, while the move was likely magnified by traders who had been anticipating lower prices and had to cover their bets.
The momentum may also have been fueled by a report that Saudi Arabia's oil minister confirmed that his nation had cut its output by 500,000 barrels a day as part of an agreement reached late last year by the Organization of Petroleum Exporting Countries.
Ministers of OPEC plan to meet Jan. 30 to decide on the need for production cutbacks beyond the 1 million barrels a day they agreed on last month.
Beyond the weather and OPEC, futures were likely to take direction from the US Energy Department's next weekly petroleum supply report, scheduled to be released today.
Analysts expect inventories of distillate, which include heating oil and diesel, to rise slightly.