West Texas Intermediate prices increased for the first time in three days as an Arctic front sweeps the U.S., the world’s biggest oil consumer.
Futures increased by as much as 0.7 percent in New York after two days of declines. It will feel as cold as minus 30 degrees Fahrenheit (minus 34 Celsius) in some locations across the northern Plains and Northeast, the National Weather Service said in a bulletin at 3:16 a.m. eastern time. U.S. inventories of distillate, including heating oil and diesel, probably decreased for a third week as freezing weather boosted fuel demand, a Bloomberg survey showed.
“Cold weather in the U.S. has helped to tighten the heating oil and propane markets as well as create regional supply tightness due to freeze offs,” Jeff Currie, head of commodities research at Goldman Sachs Group Inc. in New York, said in a research note.
WTI for March delivery rose as much as 69 cents to $96.41 a barrel and was at $96.28 as of 1:20 p.m. London time in electronic trading on the New York Mercantile Exchange. The contract fell 1 percent to $95.72 yesterday, the lowest price since Jan. 21. The volume of all futures traded was about 42 percent below the 100-day average. Prices rose 2.4 percent last week, a second weekly advance.
Brent for March settlement advanced as much as 69 cents, or 0.7 percent, to $107.38 a barrel on the London-based ICE Futures Europe exchange. The European crude was at a premium of $10.70 to WTI on the ICE exchange, compared with $10.65 yesterday.
A rare winter storm is forecast to bring heavy snow and icing to parts of the Deep South today as temperatures continue to drop across the U.S. January is on track to be the coldest month of the century in the lower 48 states, according to Commodity Weather Group LLC.
Demand for distillate rose 1.5 percent in the week ended Jan. 17 to 3.78 million barrels a day, the most since Dec. 20, the Energy Information Administration said last week. The EIA is due to release its supply data tomorrow.
“Oil prices have been able to hold their own pretty well so far, partly thanks to the cold snap in the U.S., which is generating higher heating demand and is likely to result in further depletion of the already low distillate stocks, Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said in a note today.
Crude inventories probably increased by 2 million barrels, or 0.6 percent to 353.2 million, according to a Bloomberg survey of seven analysts.
‘‘We’re settling into a range of $92-$98,’’ said Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Copenhagen. ‘‘There’s good support at $92, but $98 is a bit of a hurdle.’’