The prices of oil extended gains to near $98 a barrel on Thursday as a winter storm that slammed the U.S. raised expectations for higher energy demand and amid signs of weak supply growth.
By early afternoon in Europe, benchmark U.S. crude for March delivery was up 44 cents to $97.82 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract added 19 cents to close at $97.38.
More than a million homes and businesses were left in darkness and cold on Wednesday in the U.S. Northeast after snow, sleet and freezing rain hit the region. Some states saw around a foot of snow. Natural gas rocketed to a new four-year high on Wednesday before falling back as cold temperatures were expected to increase demand for heating fuels. Technical and speculative trades were also seen amplifying the volatility of natural gas prices.
Meanwhile, a report late Wednesday from the Energy Department showed that supplies of crude oil rose just 400,000 barrels last week, compared with analysts' expectations of a build of 1.5 million barrels, adding upward pressure to oil prices.
"The U.S. crude market — and as a matter of fact also the global market — looks reasonably strong," said a report from JBC Energy in Vienna. "It is therefore no surprise that oil prices have been able to weather the storm of emerging market currency devaluation, slides in equity prices, and flows of money back into government bonds relatively unscathed."
Brent crude, a benchmark for oil sold internationally, was up 34 cents at $106.59 on the ICE exchange in London. In other energy futures trading on Nymex: — Wholesale gasoline edged up 1.51 cents to $2.6564 a gallon.
— Heating oil added 0.35 cent to $3.0003 a gallon. — Natural gas jumped 33.5 cents to $5.365 per 1,000 cubic feet.