NEW YORK -- Crude oil futures rallied above $62 a barrel yesterday on worries that a cold winter may raise US demand for heating oil, putting a strain on storm-ravaged oil facilities in the Gulf of Mexico.
Light, sweet crude for December delivery rose $2.12 to settle at $62.44 a barrel on the New York Mercantile Exchange.
In London, December Brent crude futures rose $2 to settle at $60.24 a barrel on the International Petroleum Exchange.
Heating oil for November delivery rose more than 9 cents to settle at $1.8899 a gallon, while November gasoline rose more than 7 cents to settle at $1.6538 a gallon. November natural gas rose $1.334 to a record settlement price of $14.338 per million British thermal units.
Prices had dropped Monday after Hurricane Wilma spared oil refineries, platforms, and rigs in the Gulf of Mexico, which are still recovering from hurricanes Katrina and Rita. Wilma crashed ashore instead in Florida.
Much of the gains yesterday came from ''a lot of speculative buying," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. But, he added, heating oil led the rally due to forecasts of a long, cold winter.
''If that happens, it's going to be a challenge to meet oil demand in this country," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago.
A northeaster brought snow to parts of Pennsylvania, West Virginia, and New York yesterday, and was expected to dump snow in parts of New England. The National Oceanic and Atmospheric Administration is predicting the US winter to be colder than last year, but warmer than the 30-year average.
Some saw a legitimate buying opportunity, with Monday's prices near $60 a barrel. But James Cordier, president of Liberty Trading Group in Tampa, said yesterday's rally was partly technical, as traders who had banked on even lower prices by now were forced to cover their bets, pushing prices higher.
Cordier also said the arrival of colder weather in some parts of the country revived concerns about wintertime demand for heating oil and natural gas and whether supplies would be adequate. But he said that, without a colder-than-normal winter, oil prices could fall to the mid-$50s.
A weekly inventory report due today from the United States is expected to show crude stocks rose last week, boosted by increased imports and refineries that were still operating at a relatively low rate, analysts said.
''Crude stocks should show a sizable increase, as an expected further recovery in imports toward 10 million barrels a day more than negates the impact of additional refinery restarts," said Jim Ritterbusch of Ritterbusch & Associates.
But analysts are expecting a decrease in inventories of distillate fuels, which include diesel and heating oil. Distillate inventories have dropped in the past five weeks, and another big drop could spark a surge in prices, Flynn said.
The US Minerals Management Service said yesterday that 69 percent of daily oil production and 56 percent of daily natural gas production remains offline after hurricanes Katrina and Rita.