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SINGAPORE, Dec 5 (AFP): Oil prices were higher in Asian trade Monday as cold weather chilled key areas of the United States, raising expectations of a rise in demand for heating oil, dealers said.
At 11:25 am (0325 GMT), New York's main contract, light sweet crude for delivery in Janaury, was up 49 cents to 59.81 dollars a barrel from its close of 59.32 dollars in the United States Friday.
"It's warming up because of the weather," Victor Shum, an analyst with energy consultancy Purvin and Gertz said of the oil prices.
"Really, the market has been sort of holding its breath for the cold weather so the prices appear somewhat bullish (higher) now compared to a week or so ago when prices fell," he said.
Oil prices rose ahead of the weekend as forecasters predicted a prolonged cold snap in the northeastern part of the United States, which consumes about 80 per cent of the country's heating oil.
Predictions of a cold spell were the catalyst for speculators to return to the market despite ample supplies of oil to meet any jump in demand, dealers said.
"Now the market is reacting to the cold weather that has finally descended even though the crude oil market is well supplied," Shum said.
If the cold spell continues, prices are expected to run up further, he said.
The US Department of Energy's (DoE) weekly report will be a key indicator on whether the cold spell has triggered a jump in energy demand, dealers said.
Inventories of distillate supplies, including heating oil and diesel fuel, jumped by 3.4 million barrels during the week that ended November 25, the DoE said in its report last Wednesday.
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