Oil Prices Rise on Cold Northeast Weather

WASHINGTON – Cold weather across the U.S. Northeast and Midwest on Thursday raised concerns about increased demand for home-heating fuels this winter, pushing oil and natural gas prices higher.

That rally was most intense in natural gas futures, which surged by 83 cents in midday trade to $14.53 per 1,000 cubic feet on the New York Mercantile Exchange. That helped fuel the runup in oil prices.

Light sweet crude for January delivery climbed 54 cents to $59.75 a barrel on Nymex. In London, January Brent crude gained 55 cents to $57.53 a barrel on the ICE Futures exchange.

“This is February weather in December,” said Ed Silliere, a Nymex floor trader at New York-based Energy Merchant Intermarket Futures.

While there is enough natural gas in storage in the U.S. for a normal winter, Silliere said this early blast of frigid temperatures has made the market nervous about the possibility of a colder-than-normal winter.

Heating oil futures jumped by almost 4 cents to $1.775 per gallon, while gasoline futures rose more than 3 cents to $1.598 a gallon.

Oil and natural-gas production facilities in the Gulf of Mexico have partly recovered from damage earlier this year by hurricanes Katrina and Rita, but still have a long way to go. About a quarter of the region’s daily natural gas output, and a third of its oil output, is still down.

On Wednesday, the U.S. Energy Department said American inventories of crude oil grew last week by 2.7 million barrels to 320.3 million barrels, or 11 percent above last year. Inventories of distillate fuel, such as heating oil and diesel, rose by 2.7 million barrels to 130.6 million barrels, or about 6 percent higher than last year.