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Oil edges down but underpinned by US cold weather

Published on NewsOK Modified: February 24, 2014 at 5:49 am •  Published: February 24, 2014

The price of oil eased toward $102 a barrel Monday, taking a pause in a six-week rally that has been supported by U.S. demand for heating oil amid prolonged cold weather.

By early afternoon in Europe, benchmark U.S. crude for April delivery was down 15 cents to $102.05 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the Nymex contract fell 55 cents but was up 2 percent over the week amid rising demand for heating oil in the U.S.

Forecasters predicted a return of more cold weather in the coming weeks after a brief warm spell.

Analysts, however, have said oil prices could reverse direction due to a tempering of global demand and ample supplies.

A slower increase in Chinese property prices has added to jitters about the strength of the world's No. 2 economy. A report on manufacturing in China last week suggested global economic growth could weaken, which would reduce demand for gasoline, diesel and jet fuel.

Supplies also appeared to be robust in the U.S. despite the higher demand, with weekly crude stocks on a rising trend.

"We expect oil prices to drop in the spring, especially as refineries will then be carrying out maintenance work which is temporarily accompanied by lower oil demand," said a report from analysts at Commerzbank in Frankfurt.

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