Snow Forecast Boosts Price of Crude Oil

Oil prices rose today amid reports that a snowstorm was approaching the U.S. Northeast, the world’s largest heating fuel market. That is expected to spur demand for crude oil and natural gas.

Light, sweet crude for January delivery rose 50 cents to $59.82 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract had jumped 85 cents Friday to settle at $59.32. Nymex heating oil rose 1.75 cents to $1.7895 a gallon.

After some snow over the weekend in New England and mid-Atlantic states, Accuweather.com said the season’s first big snowstorm was headed toward northeastern states in the next day or two. The report said snow would reach Washington D.C. midday today and New York City by evening.

“Refineries will have to run hard to produce heating oil to meet demand” as winter kicks in, said energy analyst Victor Shum of Texas- headquartered Purvin & Gertz in Singapore. “This chews up more of the crude, which in turn drives up crude prices.”

Natural gas futures advanced 31.9 cents to $14.25 per 1,000 cubic feet Monday, less than 10 cents off their record settlement of $14.338 reached Oct. 25.

The retail U.S. price of gasoline, meanwhile, continued to drop across in the past two weeks, according to a survey released Sunday.

The weighted average price for all three grades dropped an additional 11 cents to $2.16 a gallon on Dec. 2, said Trilby Lundberg, who publishes the semimonthly Lundberg Survey of 7,000 gas stations around the country. Self-serve regular averaged $2.13 a gallon nationwide, midgrade cost $2.24 and premium averaged $2.33.

Prices have fallen about 88 cents a gallon since September, Lundberg said.