The price of oil closed above US$102 a barrel Tuesday on expectations that cold weather in the United States and steady Chinese growth will underpin demand.
Benchmark West Texas Intermediate crude for March delivery closed up $2.13 at US$102.43 a barrel on the New York Mercantile Exchange.
Severe cold weather has been boosting energy prices, with a prolonged wave of snow and cold temperatures hitting the East Coast most of the winter.
“Another snowstorm in the U.S. is likely to keep heating demand at a high level and spark a further decline in the already severely diminished stocks of heating oil and natural gas,” said analysts at Commerzbank in Frankfurt in a note to clients.
Optimism that China’s economy is still healthy after credit growth increased in January also helped lift energy prices.
Meanwhile, a new round of talks began Tuesday between Iran and six world powers on finalizing a deal to control Iran’s nuclear program. The outcome could have an effect on oil prices as Iran is a major oil producer and reduction of sanctions would allow the country to export more of its crude.
A weaker dollar also supported oil prices by making commodities like oil cheaper for traders using other currencies. On Tuesday, the euro was up 0.3 per cent at US$1.3747.
Brent crude, a benchmark for international oils, rose $1.28 to US$110.46 barrel on the ICE Futures exchange in London.
Among other March futures contracts trading on Nymex, wholesale gasoline rose three cents to US$3 a U.S. gallon (3.79 litres), heating oil added three cents to US$3.04 a gallon and natural gas gained 34 cents to US$5.55 per 1,000 cubic feet.
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