• BEE winners and losers

    Creating real change and real jobs requires a new ideology, says Gerhard Papenfus.

  • Governance matters

    Addressing risk well and timeously can be a source of growth, says Ian Mann.

  • Road to riches

    Taxpayers keep funding structures with big plans but who knows what efficacy, says Mandi Smallhorne.

See More

US blizzard pushes oil prices higher

Dec 28 2010 16:55 Reuters

Related Articles

Oil edges down as blizzard hits US

Oil prices soar

Crude comes off its highs

Big freeze pushes up oil price

Oil rises on demand expectations

Crude hits two-year highs


London - Oil markets edged higher on Tuesday to hover just below a more than two-year high struck the previous session after a blizzard on the US East Coast boosted demand for heating oil.

US crude for February was 30 cents higher at $91.30 a barrel by 1138 GMT. It had reached a peak of $91.88 on Monday - the highest since October 2008.

ICE Brent crude traded 9 cents higher at $93.94.

A weaker US dollar also provided support, although volumes were extremely thin across financial markets in end-of-year holiday trade.

The bulls pointed to a series of positive economic figures that could stimulate fuel demand.

"Data in recent weeks have been supportive of the stocks and commodity markets globally. The U.S. will avoid a double-dip. The Asian region including Japan looks a little bit better, with its industrial production finally showing an increase," said David Cohen, director of Asian Economic Forecasting at Action Economics.

"I think a lot of people are expecting prices to turn higher towards $100 a barrel next year."

The Organization of Arab Petroleum Exporting Countries, some of whose members also belong to OPEC, met in Cairo at the weekend, when leading exporter Saudi Arabia reiterated its preference for a $70-$80 price range. Others said $100 would be fair and the global economy could withstand it.

From a low struck in May, oil has rallied by 35%, and the market is roughly 15% higher than at the end of 2009.

A rally across financial markets took hold in earnest around September, spurred by the latest waves of US quantitative easing and a weakened dollar that can support dollar-denominated commodities.

The dollar sagged against a basket of currencies on Tuesday .


For oil-consuming countries, the sustained commodities rally has raised concerns of inflation, but OPEC ministers have said a change in output policy would only be justified if there were a significant shift in fundamentals of supply and demand as opposed to a speculative price rally.

The latest data from the U.S. Commodity Futures Trading Commission on Monday showed money managers had extended their net long crude oil positions to a record high.

The latest indications of fundamentals of supply and demand for the United States, the world's biggest oil burner, will not be released until Wednesday and Thursday. Figures published last week showed a big drop in crude inventories, although they were still higher than a year ago.

Heating oil demand has been stoked in Europe and the United States by unusually cold weather.

Temperatures in the U.S. Northeast, the world's biggest heating oil market, were expected to return to near normal on Wednesday after a major snowstorm caused chaos over the first part of the week.


commodities  |  markets  |  oil



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

How will you manage Vodacom’s price hike for contracts?

Previous results · Suggest a vote