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Oil rises to near $82, cold weather supports
January 5, 2010 / 3:18 AM / 8 years ago

Oil rises to near $82, cold weather supports

<p>An employee fills a car with petrol at a gas station in Jammu July 1, 2009. REUTERS/Mukesh Gupta</p>

NEW YORK (Reuters) - Oil rose on Tuesday, up for the ninth straight day as cold weather in the United States and Europe boosted demand for heating fuel.

U.S. crude for February delivery closed up 26 cents at $81.77 a barrel, off an earlier high of $81.99, a cent below the October 2009 high. London Brent crude closed up 47 cents at $80.59.

“Oil prices are on a cold-weather rally, with heating oil demand seen rising for the next few weeks amid forecasts for temperatures for much of the country to be much below normal in that period,” said Andy Lebow, broker at MF Global in New York.

“At the same time, economic indicators showing the economy is improving implies higher demand for diesel fuel,” he added.

Crude markets have in recent months looked to wider economic data for signs of a turnaround that could bolster flagging oil demand.

The Dow industrials slipped as a plunge in November pending home sales increased concerns about the housing market, although a sign of improvement in the manufacturing sector limited losses.

U.S. retail gasoline demand fell 3.5 percent in the week to January 1, compared with the previous week, according to a MasterCard SpendingPulse report. Consumption was up 1.2 percent over the four-week period compared with year-ago levels.

Investors were also awaiting weekly U.S. oil inventory data from the American Petroleum Institute (API) later on Tuesday and the Energy Information Administration (EIA) on Wednesday. Analysts polled by Reuters forecast the data will show a drop in distillate and crude stockpiles.

COLD SNAP CONTINUES

Frigid temperatures in the United States were expected to boost the country’s heating demand to 21 percent above normal, with consumption in the U.S. Northeast -- the largest heating oil market -- seen 11 percent above average levels.

Unusually cold weather in Britain is expected to continue into the second half of January after the coldest December since 1995, while lower temperatures in Europe were seen gradually spreading from the northeast to the southwest during the next few days.

Heavy snow and biting cold also hit parts of Asia on Monday, with unusually harsh winter weather snarling transport across north China, South Korea and India.

Investors were watching for any further developments between Russia and Belarus after an oil dispute saw Russia briefly cut off supplies to the Eastern European nation. Belarus sent a delegation to Moscow on Tuesday for talks to resolve the dispute that has raised the specter of winter supply problems for the European Union.

Additional reporting by Gene Ramos and Robert Gibbons in New York, Joe Brock in London and Jennifer Tan in Singapore; Editing by Christian Wiessner and Lisa Shumaker

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