Oil prices rose Friday, adding to gains registered the day before after a U.S. snapshot of inventories revealed a surprising drop in U.S. gasoline and heating oil supplies.
Tension between Western powers and Iran also boosted energy prices. The U.N. nuclear watchdog reported Thursday that Iran OPEC's No. 2 supplier is still refusing to end uranium enrichment, in defiance of the Security Council.
Light, sweet crude for April delivery rose 47 cents to $61.42 in electronic trading on the New York Mercantile Exchange by noon in Europe.
The Brent crude contract for April was up by 77 cents to $61.39 a barrel on London's ICE Futures Exchange.
Prices jumped 88 cents Thursday to settle at $60.95 a barrel, continuing a rally that analysts said has largely been driven by demand for petroleum products.
U.S. crude inventories climbed 3.7 million barrels to 327.6 million barrels in the week ending Feb. 16, the Energy Information Administration said Thursday. But what stoked the market's advance were gasoline inventories falling by 3.1 million barrels to 222.1 million barrels, and distillates, which include heating oil and diesel, dropping by 5 million barrels to 128.3 million barrels.
Analysts were expecting, on average, a modest rise in crude oil and gasoline inventories and a smaller drop in distillates.
"Cold temperatures and refinery maintenance in the U.S. are seen to be responsible for the considerable stock draw," said Vienna's PVM Oil Associates. The high demand has been sparked by record-breaking chilly weather and snowstorms in the Northeast and Midwest regions of the United States. Distillate fuel demand was nearly 10 percent higher over the past four weeks than it was over the same period last year, the EIA said.
Supplies remain relatively ample U.S. crude, gasoline and heating oil stockpiles are at or above the average range for this time of year, the EIA said.
Tetsu Emori, the chief commodities strategist with Mitsui Bussan Futures in Tokyo, said the market Friday could go either way, as traders approached the weekend and decided whether to take profits or buy, but said it was likely prices would remain within a tight range of $57 to US$62 a barrel in the coming days.
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