Commodity Weather Group forecasts January will be the coldest month in the US. Photo / AP
Commodity Weather Group forecasts January will be the coldest month in the US. Photo / AP
West Texas Intermediate sustained its biggest weekly gain of the year as freezing temperatures in the US boosted demand for heating oil.
Crude futures were little changed after climbing 2.4 per cent last week.
Heating oil surged to the highest price in five months amid frigid weather in the US.Commodity Weather Group forecasts January will be the coldest month so far this century in the lower 48 states.
"The cold weather in the US is driving heating oil and natural gas prices, and that's driving the WTI price," Tetsu Emori, a senior fund manager at Astmax Asset Management in Tokyo, said by phone. "Demand for middle distillates is quite good, and inventories are getting smaller."
WTI for March delivery was up at US$96.73 a barrel, up US9c, on the New York Mercantile Exchange at 11:20am Singapore time. The contact earlier rose as much as 0.6 per cent. It closed down US68c, or 0.7 per cent, at US$96.64 on January 24. The volume of all contracts traded was about 10 per cent less than the 100-day average.
Brent for March settlement fell US37c to US$107.51 a barrel on the ICE Futures Europe exchange in London. The European benchmark grade was at a US$10.78 premium to WTI, from US$11.24 on January 24.
Ultra-low-sulfur diesel futures gained as much as 1.5 per cent to US$3.1835 a gallon in New York, the highest since August 30. Prices for the contract, a proxy for heating oil, have risen eight times in the past nine days.
Temperatures in the US are expected to be 4C below normal until February 2, Matt Rogers, president of Commodity Weather Group in Bethesda, Maryland, said. The US Northeast accounts for about 85 per cent of US heating oil sales,said the Energy Information Administration.
US inventories of distillate fuels, which includes heating oil, fell by 3.2 million barrels to 120.7 million in the seven days ended January 17, the second week of declines, said the EIA. Stockpiles were at the lowest level for that time of year since 2001.
