NEW YORK, Nov 22: US crude oil futures surged on Tuesday as the belated arrival of cold weather in the US Northeast, the world’s largest heating oil market, was expected to increase fuel demand.
Traders also cited short-covering before the Thanksgiving Day holiday.
At 1715 GMT, January crude was up $1.05 at $58.75 a barrel on the New York Mercantile Exchange.
In London, January Brent crude was up $1.01 at $56.35.
“The weather remains the main driver and the market is responding,” said Kyle Cooper, analyst at Citigroup in Houston.
NYMEX will be closed on Thursday and Friday for Thanksgiving.
“This is a short-covering rally. People are covering ahead of the holiday,” said Mark Waggoner, president of Excel Futures in Huntington Beach, California.
NYMEX December heating oil was up 4.05 cents at $1.75 a gallon.
December gasoline gained 1.27 cents at $1.47 per gallon.
Temperatures in the US Northeast, which uses 80 per cent of the nation’s heating oil supply, will stay well below normal levels over the next five days, private forecaster Meteorlogix predicted.
US demand for heating oil is expected to be about 7 per cent above normal this week, ending a three-week stretch of lower-than normal demand, according to the US National Weather Service.—Reuters
