Cold Weather Drives Oil to Highest Price Since 2008
U.S crude prices for January rose as high as $90.46 a barrel, the highest since Oct. 2008, Reuters reported.
Temperatures in northwest Europe are expected to stay below seasonal norms for the next 10 days, raising demand for heating oil and prompting utilities to use their oil-fired power plants.
"The market is reacting to the very cold weather in Europe and it's expecting to see an impact on heating oil," said Roy Jordan, oil analyst at Facts Global Energy. "It's a knee-jerk reaction."
A weakening U.S. dollar further boosted prices. The dollar index declined by 0.3%.
Freezing temperatures may drain U.S. oil inventories. A Reuters poll of analysts forecast that U.S. crude stockpiles declined by 1.5 million barrels.
Industry data on inventories will be released late Tuesday, while the Energy Information Administration is due to publish government statistics Wednesday.