Winter blast sends oil prices to 14-month highSnow, ice and wind wreaked havoc on energy markets Wednesday, where a barrel of oil topped $83 a barrel for the first time since the fall of 2008. Natural gas futures soared 6 percent.
Snow, ice and wind wreaked havoc on energy markets Wednesday, where a barrel of oil topped $83 a barrel for the first time since the fall of 2008. Natural gas futures soared 6 percent.
Dangerous temperatures that knocked fruit from vines in Florida and made driving treacherous in New England had people reaching for the thermostat.
Weather easily trumped a surprise report Wednesday from the Energy Information Administration that showed the supply of crude and gasoline in storage is growing.
The amount of gas placed into storage last week was three times greater than what was expected by energy analysts polled by Platts, the energy information arm of McGraw-Hill Cos.
Still, there has been a huge influx in speculative money entering the market to start 2010, said Peter Beutel of Cameron Hanover. A weak dollar has attracted billions of new dollars. Oil is bought and sold in the U.S. currency, which means investors holding euros or other stronger currencies can get more oil for less when the dollar falls.
But it was dropping temperatures from Baltimore to Beijing that had energy prices moving. A big snowstorm hit Beijing Wednesday and freezing temperatures were expected to last there through the week.
Benchmark crude rose $1.13 to $82.90 in the New York Mercantile Exchange. Prices rose as high as $83.15 earlier in the day and that has begun to drag pump prices higher.
By the weekend, the national average price for a gallon of gas in the U.S. will top $2.70, predicted Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
That would be a rough start to the year for consumers. Prices never hit that high last year, even during the peak of the driving season over the summer.
Rising gas prices come even as more people are staying home because of the bad weather.
Prices at the pump climbed 1.8 cents to $2.685 per gallon overnight, according to auto club AAA, Wright Express and OPIS. That's 6.2 cents higher than a week ago.
In other Nymex trading in February contracts, heating oil rose less than a penny to $2.1984 a gallon. Gasoline rose less than a penny to $2.1304 a gallon. Natural gas futures rose 33.4 cents to $5.971.
In London, Brent crude for February delivery rose 88 cents to $81.47 a barrel on the ICE Futures exchange.