West Texas Intermediate rose after settling at the highest price in four months, amid speculation cold weather boosted fuel demand and stockpiles fell for a third week at the delivery point for the U.S. crude contracts.
WTI climbed as much as 0.7 percent in New York, advancing for a second day.
Supplies at Cushing, Okla., the biggest oil-storage hub in the U.S., probably decreased, according to estimates from five analysts including Phil Flynn, senior market analyst at Price Futures Group in Chicago.
A winter storm has brought snow to the nation’s Northeast, bolstering the use of heating fuels.
“Supporting the rise was speculation of a crude oil inventory draw at Cushing, as well as persistent cold weather in the U.S.,” Mark Pervan, the head of commodity research at Australia & New Zealand Banking Group Ltd., said in an emailed note Wednesday. “The Midwest and southern U.S. states are experiencing unseasonably low temperatures, which continue to support demand for heating fuels.”
WTI for March delivery gained as much as 71 cents to $103.14 a barrel in electronic trading on the New York Mercantile Exchange, and was at $103.03 at 10:40 a.m. Sydney time.
The contract, which expires tomorrow, rose 2.1 percent to $102.43 Tuesday, the highest settlement since Oct. 10. The volume of all futures traded was about 78 percent below the 100- day average. Prices are up 2.7 percent this week.
Brent for April settlement gained $1.28, or 1.2 percent, to $110.46 a barrel on the London-based ICE Futures Europe exchange Tuesday. The European benchmark crude ended the session at a premium of $8.36 for the same month.
U.S. distillate inventories, a category that includes heating oil and diesel, probably shrank by 2.1 million barrels last week, according to a Bloomberg News survey before an Energy Information Administration report tomorrow.
That will be a sixth week of declines, the longest stretch since October 2012, EIA data showed.