Freezing winds sweeping across the northern U.S. may bring snow to parts of Colorado and Wyoming, forecaster AccuWeather Inc. said on its Web site. Below-normal temperatures through Oct. 31 in the Northeast, the nation's largest heating oil consumer, will lift heating demand 30 percent above levels usual for this time of year, researcher Weather Derivatives said.
``I think oil is going to hold from here,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``You don't usually get snow until the beginning of November.''
Crude oil for December delivery was at $59.55 a barrel, up 20 cents, in after-hours electronic trading on the New York Mercantile Exchange at 8:29 a.m. in Sydney.
The contract rose 54 cents, or 0.9 percent, to $59.35 a barrel yesterday, its first gain in three days. Heating oil for November delivery was at $1.6988 a gallon after rising 1.6 percent yesterday.
``It's pretty cold out there right now,'' Phil Flynn, vice president of risk management at Alaron Trading Corp. in Chicago, said yesterday. ``We're getting into the winter season and consumption is going to go up.''
World oil demand peaks in the fourth quarter when refiners in the U.S., Europe and northern Asia prepare heating fuel for the winter.
Winter Rebound
The early cold snap coupled with the contract's failure to breach long-term support around $58.60 a barrel, may be enough to stall the recent slide in prices, Excel's Waggoner said.
``December is a fairly active month,'' he said. ``A lot of people were expecting the market to break down. But we hit that support and it's gone straight back up.''
Oil prices have fallen 24 percent from the record $78.40 reached on July 14. Futures slid the past two months as fuel stockpiles in the U.S., the world's biggest oil consumer, rose and forecasters including the Organization of Petroleum Exporting Countries trimmed their demand projections citing slower global economic growth.
U.S. oil stockpiles held 335.5 million barrels on Oct. 13, or 14 percent more than the five-year average for the period. Supplies of distillates, including heating oil and diesel, were 145.4 million barrels, 15 percent more than average.
An Energy Department report later today will probably show crude oil supplies gained 2.9 million barrels last week, based on the median estimate from a Bloomberg News survey of 10 analysts. Distillate supplies may have dropped by 1.25 million barrels while refiners had units shut for pre-winter maintenance, according to the survey.
``We have ample stocks,'' Andrew Lebow, a broker with Man Financial in New York, said yesterday ``We're well above last year and well above the average. We've got a way to go here to draw back to normal'' levels.
