NEW YORK, N.Y. – The price of oil briefly rose above US$100 a barrel for the first time this year on Friday on rising demand for fuel and some positive sentiment about the U.S. job market.
Benchmark West Texas Intermediate crude for March delivery gained $2.04, or 2.1 per cent, to close at $99.88 a barrel the New York Mercantile Exchange. Oil climbed above $100 in the afternoon before dropping back. It last topped $100 on Dec. 30.
Energy analyst Stephen Schork said oil’s rise was brought about by rising prices for wholesale gasoline and low supplies of diesel and heating oil. That combination will encourage refiners to buy and process more crude oil.
“It’s a function of a products pulling crude,” he said. “The market needs product.”
Heating oil supplies have declined as a cold and snowy winter has homeowners constantly cranking up the thermostat. The Energy Department said Wednesday that supplies of distillates, which include heating oil and diesel, fell by 2.4 million barrels last week and are now 12 per cent below year-ago levels. Heating oil futures gained six cents to US$3.05 a U.S. gallon (3.79 litres).
While some drivers have stayed indoors this winter, gasoline demand is turning out to be stronger than expected, Schork said.
Wholesale gasoline futures increased seven cents to US$2.75 and were up 15 cents, or six per cent, over the last three days.
Oil was also pulled higher by a sharp rise in the U.S. stock market. While the U.S. Labor Department’s jobs report showed a relatively weak number of new jobs, the number of people in the job market rose, suggesting that people are feeling better about their prospects and that hiring was depressed by the bad weather.
Natural gas again fell sharply amid predictions of milder weather for the U.S. Midwest and Northeast. The price fell 15 cents, or three per cent, to US$4.78 per 1,000 cubic feet, bringing the two-day decline to 25 cents, or five per cent.
Brent crude, used to set prices for international varieties of crude, rose $2.38, or 2.2 per cent, to US$109.57 a barrel, the highest close since Dec. 31.
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