Freeze pushes oil to 2-year high above $90
London, December 7, 2010
Oil rose above $90 a barrel for the first time in 26 months on Tuesday as the dollar fell and the freeze in Europe and the United States stoked fuel demand.
Temperatures in Europe's main heating hub of the northwest were expected to stay below seasonal norms over the next 10 days, according to private forecaster DTN Meteorlogix, boosting gas oil demand and prompting utilities to switch on oil-fired power plants.
Heating demand in the United States was expected to be 16.3 percent above normal in the week to Dec 11, according to the US National Weather Service.
US crude prices for January were on track to rise for the fifth consecutive day and by 1206 GMT were up $1.04 cents at $90.42 a barrel. Prices earlier touched $90.46 a barrel, the highest since October 2008.
ICE Brent rose $1.09 cents to $92.54 a barrel by the same time.
"The market is reacting to the very cold weather in Europe and it's expecting to see an impact on heating oil....it's a knee-jerk reaction," said Roy Jordan, oil analyst at Facts Global Energy. -Reuters