Oil up in Asia as US cold snap boosts demand
Singapore: Oil prices bounced back in Asian trade Tuesday as a cold snap in the United States boosted demand for heating fuel.
New York's main contract West Texas Intermediate for February delivery rose 15 cents to $93.58 in afternoon trade while Brent North crude added 43 cents to $107.16.
Both contracts closed lower on Monday as a Libyan oil field stepped up production after the government convinced residents to lift a five-month blockade.
Desmond Chua, market analyst at CMC Markets in Singapore, said the cold weather in the United States was supporting demand for heating fuel.
“More oil is being used for heating and we do see an increase in the basic demands for necessities.”
Dangerously cold Arctic air swept across a huge swath of the United States on Monday making travel treacherous, forcing schools to close and prompting officials to urge residents to stay indoors.
A shift in a weather pattern known as the “polar vortex” triggered a drastic drop in temperatures to lows not seen in two decades, and coincided with wind chill warnings in much of the east of the country.
US demand is a key driver for oil prices as it is the world's largest economy and the biggest oil consuming nation.
Prices however are likely to be under downward pressure over the longer term owing to ample supplies and an expected stabilisation in demand, analysts have said.
Production at Libya's Al-Sharara oilfield rose to 207,000 barrels per day on Monday, up from 60,000 on Saturday, according to a Libyan oil official.