Crude prices rose as the extreme weather continues to grip large parts of America, posing a threat to supplies and driving up demand for heating.
Arctic winds, or more technically a “polar vortex”, sweeping through America’s mid-west have sent temperatures plummeting below minus 26 degrees – apparently cold enough for a zoo in Chicago to send its polar bears indoors.
Given the increased demand for heating, and the inevitable logistical disruptions that will impact on the supply chain, the arctic weather is expected to drive oil prices higher.
This afternoon’s stats from the American Petroleum Institute, the first of the weekly oil inventory reports, won’t shed a great deal of light upon the potential impact of the weather, though they will as always give some steer to the market.
In London trading both Brent and West Texas Intermediary futures gained around 50 cents per barrel, trading at US$107.25 and US$93.90 respectively.
Elsewhere, the continued tensions surrounding Libya’s attempts to lift production also remain a focus for oil traders.
The North African nation’s oil production is set to reach 600,000 barrels a day, from around 250,000, but reports of fresh protests have raised tensions at the same time.