By Gillian Wong / AP
Singapore: Oil prices rose Monday, 17 December, as another winter storm pummeled the US with snow, sleet and freezing rain —weather conditions that were expected to boost fuel demand.
Around a foot of snow had fallen on parts of the Chicago area, with 10 inches in Vermont. The US National Weather Service on Sunday posted winter storm warnings from Michigan and Indiana all the way to Maine. Meteorologists said 18 inches was possible in northern New England; more snow was still expected in parts of Michigan.
The storm came less than a week after an ice storm was blamed for at least 38 deaths, mostly in traffic accidents, in the middle of the country. Thousands of homes and businesses still had no electricity in parts of Oklahoma, Kansas and Missouri.
Light, sweet crude for January delivery added 50 cents to $91.77 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore.
The contract fell 98 cents to end at $91.27 a barrel Friday after the US government said consumer inflation jumped in November by the largest amount in more than two years.
Energy traders are concerned rising inflation will cut consumers’ buying power and reduce demand for gasoline and oil. They also worry that higher inflation means the Federal Reserve will stop cutting interest rates.
Many analysts cite the Fed’s recent rate-cutting campaign, and its role in depressing the value of the dollar, as a major factor behind oil’s rise in November to a record above US$99 a barrel.
Many economists believe US economic growth in the current October-December quarter could fall below 1% at an annual rate, sharply below growth of 4.9% in the third quarter. The US economy is struggling under the weight of a meltdown in housing, a severe credit crunch and faltering consumer confidence.
Heating oil futures added 1.73 cents to $2.6252 a gallon (3.8 litres) while gasoline added 0.98 cent to $2.3515. Natural gas futures lost 5.5 cents to $6.97 per 1,000 cubic feet.