Cold forecast pushes oil prices up
By Gillian Wong
By Gillian Wong
SINGAPORE — Oil prices rose yesterday on the prospect of more cold weather in the United States, the world's largest energy consumer. OPEC's president also said the group's members support keeping production at present levels.
Sheik Ahmed Fahd Al Ahmed Al Sabah, who is also Kuwait's oil minister, indicated that the Organization of Petroleum Exporting Countries will not change its output when the ministers meet Dec. 12.
"I have support to keep output unchanged," he said ahead of a meeting of European Union and OPEC ministers in Vienna that was focused on coordinating oil supply and demand and planning energy strategies for the coming years.
Light, sweet crude for January delivery gained 43 cents to $58.90 a barrel in midday trading on the New York Mercantile Exchange. The contract had jumped $1.15 to settle at $58.47 a barrel Thursday as a winter storm approached the U.S. Northeast, which is likely to boost demand for heating oil.
January Brent at London's ICE Futures gained 49 cents to $56.64 a barrel.
The U.S. Energy Information Administration said this week that gasoline demand for the four weeks ended Nov. 25 averaged 9.178 million barrels a day, up 2.13 percent over October levels and a 1.3 percent increase over the same period a year ago. Gasoline consumption typically grows at an annual rate of 1.5 percent to 2 percent.
The Commerce Department said gross domestic product expanded at a revised 4.3 percent annual rate in the third quarter, the fastest pace of growth since the first quarter of last year.
Ken Hasegawa of Tokyo-based brokerage Himawari CX said robust gasoline demand in the United States coupled with strong economic growth could push January Nymex crude futures above $60 a barrel in the coming weeks.
Over the weekend, a snowstorm is expected to hit the some Midwest states and parts of the Northeast, the nation's largest heating oil market.
"There is little doubt that the first days of December are going to be cold in a lot of places," said forecaster AccuWeather.com. "Today's weather is just the beginning of an extended period of wintry weather across the nation."
Crude futures are 17 percent below their all-time high of $70.85 in late August after Hurricane Katrina battered the Gulf coast.