Oil prices moved higher Friday, pushed by cold weather, production cuts and a partial shutdown at a major Northeast refinery.
Light sweet crude oil for delivery in January settled at $17.13 per barrel, up 1 cent at the New York Mercantile Exchange. The contract had been up as much as 24 cents earlier in the day.The January home heating oil contract settled at 49.27 cents a gallon, up 0.16 cent.
January unleaded gasoline settled at 52.69 cents a gallon, up 0.84 cent.
Cold weather, especially in the heating oil-dependent Northeast, has been pushing prices up for several days. Tom Curtis, director of energy research at Pegasus Econometrics Group in New York said, however, the effect of the chills has just about run its course in the market.
Of greater impact Friday was a partial suspension of operations at Tosco Corp.'s Bayway refinery in Linden, N.J. The company is making some needed repairs, prompting an estimated 25 percent reduction for about a week, said George Gaspar, oil analyst with Robert W. Baird & Co. Inc., a Milwaukee investment firm.
Curtis said Bayway is one of the largest refineries in the Northeast, so any cut in production will have an impact. "Gasoline went through the 53-cent level, which kind of astonished us, and the crude contract followed it," said Curtis.
Later in the session Friday, some traders took profits. That brought prices down from their peaks of the day, but still higher than Thursday.
Crude oil inventories are down only slightly from last year at this time, but the percentage of refineries operating declined this week, compared to last week, and demand is heading up, said Curtis. This is also helping prices higher, said Curtis.
Other factors included a decline in shipments of crude from the North Sea to North America and concerns about U.S. environmental rules taking effect on Dec. 28th, requiring that all vessels shipping hazardous goods here have certificates proving they have full liability coverage for any spills, he said.
"Added together these factors could present some (supply) problems," he said.
Natural gas prices were lower with contracts for delivery in January settling at $1.842 per 1,000 cubic feet, down 0.5 cent. Curtis said some traders took profits Friday, following a runup in prices earlier in the week.
In London, North Sea Brent Blend crude oil for delivery in January settled at $16.26 per barrel, down 3 cents at the International Petroleum Exchange.