NEW YORK — Oil prices rose above $79 a barrel Monday for the first time in four weeks as an extended cold snap in the United States triggered an end-of-year rally in energy futures.
Benchmark crude for February delivery added 72 cents to settle at $78.77 a barrel in light, holiday trading on the New York Mercantile Exchange. Prices rose as high as $79.12 earlier in the day, the highest since Nov. 18.
Futures contracts for oil, natural gas and heating oil have all become more expensive this month as snow storms blanketed parts of the United States and a sharp drop in supplies of crude and other fuels surprised traders.
More frigid temperatures are expected, with up to 10 centimetres of snow forecast for New England, and up to 18 centimetres along the eastern shores of the Lower Great Lakes.
Spot prices are starting to perk up as a result.
According to the latest data from the U.S. Energy Information Administration, natural gas prices jumped earlier in December to the highest levels since January, and heating oil prices climbed during the middle of this month.
The EIA was expected to release its weekly survey on retail gas prices later.
Still, the winter chill hasn’t boosted energy demand above last year’s levels. The U.S. is consuming less petroleum than it did at the same time last year, when oil and gas prices were cheaper and the economy was in recession.
American refiners have cut back on oil imports, which has helped reduce supplies and increase prices. But analyst Andrew Lipow said that oil prices also are rising as China and India expand their petroleum imports.
“That oil is finding a buyer somewhere,” Lipow said.
In other Nymex trading in January contracts, heating oil climbed 3.79 cents to settle at US$2.0735 a U.S. gallon (3.78 litres), while gasoline added 2.88 cents to settle at US$2.0184 a U.S. gallon. Natural gas increased by 34.7 cents to settle at US$5.99 per 1,000 cubic feet.
In London, Brent crude for February delivery rose $1.01 to settle at US$77.32 a barrel on the ICE Futures exchange.