The cost of crude oil rose on the speculation that colder weather in the
Northeast may reduce stockpiles of the fuel, Bloomberg reported Monday.
The Northeast region consumes about 80 percent of
heating oil used by U.S. homeowners. Weather forecasters predict low temperatures in Dec.
19 through Dec. 22., increasing the demand more
distillate fuels, a category that includes heating oil and
diesel, which are below year-ago levels, the report said. Prices plunged on Dec. 10 on
skepticism that OPEC would enact production cuts.
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“Once the cold weather arrives you see the prices rise; it
happens every year,” Tom Bentz, an oil broker at BNP
Paribas Commodity Futures Inc. in New York, told the news service. “There are also the
Iraqi problems and signs that the Saudis are perhaps instituting
production cuts.”
Crude oil for January delivery rose 30 cents, or 0.7
percent, to close at $41.01 a barrel on the New York Mercantile
Exchange. Oil has declined 26 percent from a record of $55.67 on
Oct. 25. Prices were up 24 percent from a year earlier. Futures
touched $40.25 today and on Dec. 10, the lowest since July 21.
Heating oil for January delivery rose 3.13 cents, or 2.6
percent, to close at $1.257 a gallon in New York. Prices have
declined 22 percent from the record $1.6033 a gallon touched on
Oct. 22, Bloomberg reports.
The Organization of Petroleum Exporting Countries, which
pumps more than a third of the world’s oil, agreed to cut output
by 1 million barrels a day as of next month to halt the market’s
seven-week slide.
Bloomberg News
