NEW YORK: Oil inched toward $82 a barrel on Tuesday, up for the ninth straight day as cold weather in the United States and Europe boosted demand for heating fuel.
US 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.
On Monday, the market settled up $2.15 at $81.51, the highest close since Oct. 9, 2008.
“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 S&P 500 was marginally higher in seesaw trading following mixed economic data. The National Association of Realtors said pending home sales fell 16 percent in November, a far sharper drop than expected.
The housing number was partially offset by the US government’s report that new factory orders rose 1.1 percent in November.
Investors awaited US oil inventory data from the American Petroleum Institute (API) later on Tuesday and the Energy Information Administration (EIA) on Wednesday, expected to show a drop in distillate stocks but steady crude inventories.
US crude futures would reach the highest point since Oct. 14, 2008 if they push above $82 and some analysts said it was the anticipation that prices would rise above this psychological point that had boosted oil recently.
“The price rise is not supported by fundamentals today, it is investment driven,” Eugen Weinberg, oil analyst at Commerzbank, said on Tuesday.
“There is a lot of speculative demand given the fact that we are close to $82, which was the intraday high last year.”
Frigid temperatures in the US were expected to boost the country’s heating demand to 21 percent above normal, with consumption in the US Northeast — the largest heating oil market — seen 11 percent above average levels.
US retail gasoline demand fell 3.5 percent in the week to Jan. 1, compared with the previous week, according to a MasterCard SpendingPulse report, but consumption was up 1.2 percent compared with year-ago 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.