Oil prices stayed on their upward track in the last week of 2010, helped in part by a crippling blizzard that slammed the U.S. Eastern Seaboard Christmas weekend and into the new week. Crude moved higher to $91.50 a barrel, as OPEC's Arab ministers met in Cairo to discuss cartel strategy. Their decision to keep output unchanged combined with traders now foreseeing a greater need for heating oil as winter has hit much harder -- and earlier -- than expected is keeping upward pressure on crude prices.
U.S. forecasters believe that the winter of 2010-2011 may be one of the coldest on record. Europe, which recently faced its own blizzard, may have its coldest winter in decades as well. Oddly enough, many scientists blame global warming for the weather, at least partly because as the Arctic ice cap melts, it sends cold water south by way of the oceans.
On the other side of the world, record low temperatures have been recorded in the northern parts of Korea and China, a weather pattern that experts expect to continue.
OPEC has often come to the rescue of nations that are drawing down their oil reserves, but cartel ministers are not calling for any increases in production this winter. The global economy can withstand an oil price of $100 a barrel, Kuwait's oil minister said, according to Reuters.
Another bullish factor is increased demand from manufacturers in China, which is the largest net importer of oil. With crude seeing additional demand as the developed nations recover, the result could be price rises well into 2011. Unless, of course, China's Christmas weekend interest rate hike has the intended effect of slowing that nation's superhot economy, with the attendent ripple effects spreading to its major Western trading partners. Until then, old man winter may have more sway over oil prices.