Oil prices advance on expected drop in US stocks

December 29, 2010 | 11:07

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Oil prices moved higher Tuesday amid expectations of a fall in US stockpiles as a cold snap hit heavy energy consuming regions of the United States and Europe.

On the New York Mercantile Exchange, a barrel of light sweet crude for February delivery was up 49 cents at $91.49.

That kept prices close to Monday's peak levels, which were the highest since October 2008.

"It has been miserably cold (in the United States)... as far as Florida in the south, starting very early, we've just started the winter season," said Rich Ilczyszyn of Lind-Waldock. "That is cutting into supply."

In London a barrel of Brent North Sea crude for February delivery was up 53 cents to $94.38 on the InterContinental Exchange.

The London oil market was closed on Tuesday for the second day of a long holiday weekend, with only electronic trading providing an indication of price movement.

Analysts said blizzards battering the US northeast and eastern Canada point to a draw-down in US petroleum stocks this week as crude oil is transformed into heating fuel.

At the same time cold weather is continuing in Europe.

US reserves fell by about 15 million barrels in the first half of December in the face of brisk demand and end-of-year inventory adjustments by refiners.

New figures on US stocks are to be published Thursday.

AFP

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