SINGAPORE: Oil prices rose Monday in Asian trading as market participants anticipated a jump in fuel demand prompted by a late winter cold snap in the U.S. Northeast, the world’s largest heating oil market.
Light, sweet crude for March delivery rose 5 cents to US$59.07 a barrel on the New York Mercantile Exchange midmorning in Singapore.
The contract on Friday rose US$1.72 to settle at US$59.02 a barrel on colder-than-normal U.S. weather and supply worries driven by a second round of OPEC production cuts.
Oil prices had earlier fallen as low as US$49.90 a barrel after an unseasonably warm January.
”The market is just looking at the current cold weather in the U.S. and taking long positions” based on it, said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.
A cold snap that rushed across the U.S. Northern Plains and Midwest late last week was now affecting the Northeast as well, with below-normal temperatures expected from the Dakotas into New England over the next few days, Accuweather.com reported Sunday.
”Along with the brutal cold will come strong winds, which will make the already frigid temperatures feel even colder,” the forecaster said on its Web site.
Oil prices had also been supported Friday by concerns the two main Nigerian oil workers’ unions would hold a strike this week in protest of rising violence in Africa’s biggest petroleum producer. The planned Monday strike was called off pending a meeting with President Olusegun Obasanjo.
The 20,000-strong blue- and white-collar unions had threatened the work stoppage after an increase in the number of kidnappings and oil-industry attacks across the southern Niger Delta area, where most of crude in Africa’s oil giant is pumped.