Oil price pushes back towards $32 as US cold snap predicted
The price of oil pushed higher again on Monday after a heavy sell-off late last week as predictions of colder weather in the United States prompted expectations of a spike in demand.
A barrel of North Sea Brent reference crude for January delivery was quoted at $30.75, up from $30.17 at the close on Friday -- the lowest closing level for Brent crude in two months.
In New York, the light sweet crude January contract was going for $32.63 a barrel, up 61 cents on Friday's closing level.
Salomon Smith Barney analyst Peter Gignoux said that forecasts for a belt of Arctic air to hit the US midwest and east had driven up prices of refined products, pulling crude prices up in their wake.
"It will be the biggest mass of cold air in the last four years and as a result of that heating oil prices are up, almost six cents a gallon," Gignoux said. "It's taking crude up with it."
The market meanwhile remained sanguine about Iraq's export freeze, announced last Thursday amid a simmering row between Baghdad and the United Nations over pricing and payments.
"The suspension of Iraqi crude is not significant in the short term if that oil can be provided from other sources," said the GNI brokerage in a research note.
Saudi Arabia said on Friday that the Organisation of Petroleum Exporting Countries (OPEC) could agree to increase output to make good the difference.
The United States has already said that it could dip into its strategic petroleum reserve if the Iraqi export freeze bites this winter.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)