NEW YORK: Oil jumped 1 percent to a 26-month high above $92 a barrel Monday as upbeat European and US manufacturing data and forecasts for cold weather stoked energy demand expectations. Manufacturing in the United States and Europe accelerated in December and growth in China and India slowed to a more sustainable level, helping to fuel a move by investors into riskier assets. US crude oil for February delivery rose 75 cents to $92.13 a barrel at 1:23 P.M. EST (1823 GMT), having reached $92.58, its highest price since October 2008. In London, ICE Brent crude for February rose 68 cents to $95.43 a barrel. US heating oil and front-month ICE gas oil futures led the oil futures complex higher, supported by expectations more freezing weather will arrive later in January. US crude oil futures were building on their end-of-year rally that left prices up 15 percent on the year. Total US crude futures trading volume, thinned by the holiday season, was above 265,000 lots in afternoon trading in New York. The 30-day average was 543,282. “Heating oil strength is on the colder forecasts further out, and on top of that crude is being supported by the strong manufacturing data,” said Phil Flynn, analyst at PFGBest Research in Chicago. Total US heating demand this week was expected to be only 0.5 percent above normal, the US National Weather Service said, and heating oil demand was expected to average 4.3 percent below normal. The American Petroleum Institute saidcrude inventories rose 3.1 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast a drop of 3.2 million barrels. The crude supply increase was the first in five weeks and just the second in the last nine. Inventories are 4 percent above last year and 9.3 percent higher than the average from 2004 to 2008. “This should raise concerns about demand levels relative to supply,” energy consultant The Schork Report said. Inventories of gasoline fell 3.1 million barrels and distillates added 1.4 million barrels, the API said. The Energy Department's Energy Information Administration reports its weekly supply data later Thursday. Traders will be closely watching the latest data on weekly US jobless claims, pending home sales and industrial production to gauge the strength of the economic recovery. Oil has hovered above $91 this week amid thin year-end trading volume. Global oil markets are closed Friday for the New Year's Day holiday. But looking further out, the NWS' six- to 10-day and eight- to 14-day outlook issued Sunday called for below-normal or much-below-normal readings for the entire nation.
