Oil rose for the first time in four days as the US mid-Atlantic region braced for a new winter storm in coming days and dug out from a weekend blizzard.
Oil rebounded from a seven-week low after the National Weather Service issued storm warnings from Utah to New Jersey and advisories for below-normal temperatures in the East that would increase demand for heating fuel. The weekend storm left almost 40 inches of snow in some places and shut government offices today in Washington.
"The cold weather is persisting here, and it's not relenting," said John Kilduff, a partner at Round Earth Capital, a New York-based hedge fund that focuses on food and energy commodities. Oil prices also advanced amid technical support at the 200-day moving average of $US70.72, he said.
Crude oil for March delivery rose 65 US cents, or 0.9 per cent, to $US71.84 a barrel at the close of floor trading on the New York Mercantile Exchange. Oil settled at $US71.19 on Feb. 5, the lowest price since Dec. 15. Futures have gained 79 per cent in the past year.
Oil futures reached a record daily volume of 1.12 million contracts on the exchange Feb. 5, according to a statement today from Nymex parent CME Group Inc. The previous record was 1.09 million contracts on June 6, 2008, as oil prices climbed toward an all-time high of $US147.27 on July 11, 2008.
The National Weather Service is forecasting temperatures will be below normal for the next six to 10 days along the East Coast, from Florida to Maine.
