Oil prices rose in Asian trade today, extending gains on strong demand for heating fuel in the US as the country grapples with severe winter weather.
US benchmark West Texas Intermediate (WTI) crude for March delivery advanced 15 cents to $97.53 in late morning trade, while Brent North Sea crude was up five cents at $106.30 a barrel for its March contract.
Stockpiles at the trading hub in Cushing, Oklahoma, sank 1.5 million barrels, the Department of Energy (DoE) said, indicating strong demand and pushing the prices higher.
“I think we are seeing that inventories are coming in better than expected due to the cold snap which... helped to cut back on the supply glut in Cushing,” Desmond Chua, market analyst at CMC Markets in Singapore, said.
US commercial crude reserves rose 400,000 barrels in the week ended January 31, the DoE said on Wednesday, much smaller than the average analyst estimate of 2.2 million.
But traders focused on the fourth straight week of declines in distillates, which include diesel and heating oil. Distillates fell 2.4 million barrels, more than the 2.0 million barrels estimated.
Treacherous snow and freezing rain struck the north-eastern United States on Wednesday, disrupting thousands of flights and causing traffic chaos for millions.
More than 600,000 people were without power as high winds and ice knocked down trees and electrical lines.