NEW YORK — Oil started the new year Monday trading above $81 a barrel, almost double what it fetched at the beginning of 2009 even though the U.S. is using much less.
Prices, which have been propped up by a weak dollar, will get even more support as winter weather chills the country. That means gasoline, heating oil and other fuels are also probably headed higher as the market tests how much people are willing to pay for energy, analysts said.
"It looks like Antarctica out there," analyst Stephen Schork said. "It’s snowing everywhere. This winter is like a gift from the bullish gods."
Benchmark crude for February delivery climbed $1.92 to $81.28 a barrel on the New York Mercantile Exchange. In London, Brent crude for February delivery rose $2.00 to $79.93 a barrel on the ICE Futures exchange.
Oil refiners have shuttered some of their operations and are pulling back elsewhere as the rising cost of crude cuts into profits. In the last week of December, U.S.-based refining slowed to the lowest level ever for that time of year, according to government records dating back to 1990.
The U.S. is still sitting on a large surplus of gasoline, but if refiners continue to cut back on their operations, gas prices will inevitably press higher.
"They’re losing money hand over fist," Schork said. If we drive prices up so high, and we take so much gas off the market, eventually those shortages drive up prices."
In other Nymex trading in February contracts, heating oil rose 6.78 cents to $2.1834 a gallon and gasoline gained 4.78 cents at $2.1007 a gallon. Natural gas jumped 25.9 cents to $5.831 per 1,000 cubic feet.