Singapore: Oil edged up towards $82 a barrel on Tuesday, posting its ninth straight day of gains, as a surprise cold snap in the key consuming regions of the United States and Europe boosted demand for heating fuel.
A slew of US data - November factory orders later in the day, besides jobless claims and employment numbers later in the week - will offer clues on the health of the economy and demand outlook from the world’s top oil consumer.
Markets are also keeping an eye on an oil pricing dispute between Russia and Belarus that briefly cut off supplies to the Eastern European nation. Russia on Monday said it had resumed supplies to refineries in Belarus, but tension still simmers.
Weekly US oil inventory data from the American Petroleum Institute (API) due later on Tuesday and the Energy Information Administration (EIA) due on Wednesday, are also expected to be mildly price-supportive.
US crude for February delivery rose 17 cents to $81.68 a barrel by 8:54am, after settling up $2.15 at $81.51 on Monday, its highest close since 9 October, 2008. London Brent crude climbed 11 cents to $80.23.
“Oil is very well supported due to colder weather in the northern hemisphere markets, and it looks like the bullish bias is here to stay for now,” said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
“We’re also seeing new money coming in on the long side, taking fresh positions for the new year.”
Frigid temperatures were expected to boost US heating demand to 21% above normal, with consumption in the US.northeast -- the largest heating oil market -- seen 11% above average levels.
Unusually cold weather in Britain is expected to continue into the second half of January after the coldest December since 1995, while colder temperatures in Europe were seen gradually spreading from the northeast to the southwest during the next few days.
Heavy snows and biting cold also hit parts of Asia on Monday, with unusually harsh winter weather snarling transport across north China, South Korea and India.
Oil also got a boost from a weak dollar. The greenback steadied on Tuesday, keeping broad losses made the previous day, as growing hopes for a global economic recovery spurred investors to shift funds to riskier assets from the greenback.
US economic data due this week will likely show that a patchy recovery is already underway in the world’s largest economy. In the evening the Commerce Department will release November factory orders, which are expected to rise 0.5% compared with a 0.6% gain in the prior month.
At 2:00am, API data is forecast to show a 1.9 million barrel drawdown in distillate stocks, which include heating oil and diesel fuel, last week, while crude stocks were seen unchanged and gasoline supplies higher.