Oil Rises a Fourth Day on Colder Weather, U.S. Economic Growth
Oil Rises a Fourth Day on Colder Weather, U.S. Economic Growth
Dec. 5 (Bloomberg) -- Crude oil rose for a fourth day in New York on expectations colder weather and U.S. economic growth will boost demand in the world's largest energy user.
A snowstorm moving up the U.S. east coast will spur above- average heating demand in the Northeast, forecaster Meteorlogix LLC said yesterday. A Commerce Department report tomorrow may say factory orders rose 2.2 percent in October after falling the month before, a survey showed.
``The market is rebounding because of colder temperatures in the U.S.,'' said Naohiro Niimura, vice president of derivative products at Mizuho Corporate Bank Ltd. in Tokyo. ``The trend will continue till the end of the year. The U.S. economy is very strong.''
Crude oil for January delivery rose as much as 56 cents, or 0.9 percent, to $59.88 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $59.84 at 11:57 a.m. in Singapore. Prices are 39 percent higher than a year ago.
The January contract rose 85 cents, or 1.5 percent, to $59.32 a barrel on Dec. 2, the highest close since Nov. 8 and the contract's third straight gain. Prices have fallen 16 percent since touching a record $70.85 a barrel on Aug. 30, the day after Hurricane Katrina struck the U.S. Gulf coast.
World oil demand typically peaks in the fourth quarter when consumers in Europe and the U.S. store heating fuel for the northern hemisphere winter. The Northeast accounts for 80 percent of U.S. heating oil demand.
Snow Storms
A storm will bring snow to New York and Washington later today and will drop more than a foot of snow in parts of Virginia, forecaster AccuWeather Inc. said on its Web site yesterday. Heating demand in New York this week will be 40 percent above average, and 30 percent higher in Boston, Meteorlogix said.
Heating oil for January delivery rose as much as 1.92 cents, or 1.1 percent, to $1.7912 a gallon in after-hours trading. It rose 3.33 cents, or 1.9 percent, to $1.772 a gallon on Dec. 2, the highest close since Nov. 9.
The U.S. economy added 215,000 jobs in November, bouncing back from two months of weak job growth following Hurricanes Katrina and Rita, the Labor Department said Dec. 2. The economy grew at a 4.3 percent annual rate from July to September, the quickest since the first quarter of last year, the Commerce Department said Nov. 30.
Gasoline
Gasoline for January rose and gained almost 11 percent the in the past four sessions on expectations expansion in the U.S. economy will sustain demand for motor fuel. The U.S. uses about 10 percent of the world's oil to make gasoline.
Stocks of gasoline ``remain pretty low and the outlook for the U.S. economy has improved quite a bit,'' said Gerard Burg, a minerals and energy economist at National Australia Bank Ltd. in Melbourne.
Gasoline for January delivery rose as much as 0.67 cents, or 0.4 percent, to $1.6180 a gallon in after-hours trading. It rose 3.1 percent to $1.6113 on Dec. 2. Prices are 42 percent higher than a year ago.
U.S. inventories of the fuel dropped 545,000 barrels to 199.9 million in the week ended Nov. 25, 3 percent lower than a year earlier, according to Energy Department data.
OPEC is unlikely to cut output or re-impose quotas when it meets in Kuwait next week, the group's President Sheikh Ahmad Fahd Al-Sabah said on Dec. 2.
The Organization of Petroleum Exporting Countries will review a September decision to suspend its limits on production after prices rose to record in the after Katrina hit refineries, platforms and pipeline in the U.S. Gulf region.
Asian oil consumption may double as China, India and other developing nations in the region demand more of the commodity to feed their booming economies, said Marc Faber, who publishes The Gloom, Boom & Doom monthly newsletter.
``After 1965, not a single large oil field has been discovered,'' Faber, who manages $300 million at Marc Faber Ltd., said at the Commodity Investment World conference in Sydney today. ``I doubt the incremental supply of oil in the next 10 years will match the incremental demand from Asia.''
To contact the reporter on this story: Will Kennedy in Singapore at wkennedy3@bloomberg.net
Market Data 
Markets 
AI
