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 per cent 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.
Global oil markets were supported by more production and export snags in Libya and South Sudan, as well as concern over street protests in Venezuela, a major oil supplier to the U.S.
“So far, the protests have not led to production shut-ins or export disruptions, but if the situation is not resolved, these will become more and more likely,” said analysts from JBC Energy in Vienna in a note to clients.
Brent crude, which is used to set prices for international varieties of crude, was down 24 cents to $109.61 on the ICE Futures exchange in London.
In other trading on the Nymex:
— Wholesale gasoline lost 1.29 cents to $2.9901 per gallon.
— Heating oil was down 0.19 cents at $3.037 a gallon.
— Natural gas jumped 15.5 cents to $5.167 per 1,000 cubic feet.