The price of oil climbed to near $94 a barrel Wednesday as U.S. demand for heating fuel was expected to rise amid severe winter weather.
By early afternoon in Europe, benchmark U.S. oil for February delivery was up 26 cents to $93.93 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the Nymex contract rose 24 cents to end at $93.67.
A deep freeze has spread from the U.S. Midwest to the East and South, setting record low temperatures from Boston to Birmingham, and killing 21 people. The Midwest and the East experienced temperatures colder than much of Antarctica, supporting oil prices as demand for heating fuel rises.
“The big freeze in the U.S. hit some of the refinery oil operations, causing a short-term shutting down that helped crude oil prices to move higher,” said a note to clients from Sucden Financial Research in London.
An estimated 190 million people in the U.S. were subjected to the icy blast, caused by a kink in the “polar vortex,” the strong winds that surround the North Pole. Authorities said the worst should be over in the next day or two. Warmer weather — at least, near or above freezing — is in the forecast for much of the stricken part of the country.
Prices were also supported by instability in oil-exporting countries in North Africa and the Middle East, particularly Libya, where production never quite recovered from the civil war that broke out nearly three years ago.
Looking ahead, investors are waiting for the U.S. government’s crude inventory report that is likely to show a fall in stockpiles last week, indicating stronger demand.
A survey of analysts by Platts, the energy information arm of McGraw-Hill Cos., showed expectations of a draw of 3.3 million barrels in crude oil stocks and a build of 2 million barrels in gasoline stocks.
Late Tuesday, the industry funded American Petroleum Institute reported a fall of 7.3 million barrels in crude stocks last week. The report from the Energy Department’s Energy Information Administration — the market benchmark — will be out later Wednesday.
Brent crude, used to set prices for international varieties of crude, was up 51 cents to $107.86 on the ICE Futures exchange in London.
In other energy futures trading:
— Wholesale gasoline added 0.17 cent to $2.6803 a gallon.
— Natural gas rose 3.8 cents to $4.337 per 1,000 cubic feet.
— Heating oil was up 1.04 cents to $2.9697 a gallon.