The price of oil fell slightly but remained above $102 on Friday, underpinned by U.S. demand for heating oil during a winter that does not seem to want to end.
Benchmark U.S. crude for April delivery fell 55 cents to close at $102.20 a barrel on the New York Mercantile Exchange. On Thursday, the contract fell 9 cents to close at $102.75. Oil is up 2 percent for the week, however, on higher demand for heating oil in the U.S. as forecasters predicted a return of more cold weather in the coming weeks after a brief warm spell.
"Market players are now looking at weather conditions in the U.S., it's quite cold and heating oil demand is getting tighter so that is supporting the crude oil prices," said Tetsu Emori, commodity markets fund manager at ASTMAZ Futures Co. in Tokyo.
Analysts said the recent rising trend in oil prices, which climbed for the sixth week in a row, could be about to reverse, however, because of tempering global demand and ample supplies. A report on manufacturing activity in China released Wednesday suggested global economic growth could weaken, which would reduce demand for gasoline, diesel and jet fuel.
Also, supplies appear to be relatively strong in the U.S., despite the higher demand, according to this week's oil report from the U.S. Energy Department. "Crude stocks in the U.S. were up week-on-week, while the draw in distillate inventories was lower than expected," said a report from JBC Energy in Vienna. "Together with the weak Chinese data from Wednesday, this took a part of the enthusiasm out of the recent rally."
Brent crude, a benchmark used to set prices for international varieties of crude used by many U.S. refineries, was down 45 cents to close at $109.85 a barrel in London. The average retail price of gasoline in the U.S. rose for the 14th straight day, to $3.39 per gallon. That's the highest level for the year, but it is 39 cents below where it was last year at this time.
In energy futures trading in New York: — Wholesale gasoline fell 1.8 cents to close at $3.003 a gallon. — Natural gas rose 7.1 cents to close at $6.135 per 1,000 cubic feet. — Heating oil fell 4.4 cents to close at $3.039 a gallon.
Pablo Gorondi in Budapest contributed to this report.