Home » NEWS » Oil starts year above $81 a barrel

Oil starts year above $81 a barrel

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.

BEFORE YOU GO…

… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Megan Wright

Leave a Reply

Your email address will not be published. Required fields are marked *

*