U.S. crude oil futures began 2010 on a positive note Monday, gaining 2.15 percent to settle at $81.51 per barrel for February delivery. Earlier in the trading day, oil futures surged to $81.68.
Unusually cold weather throughout much of the U.S., coupled with a weak Dollar, contributed to oil's strong performance Monday. Adding upward pressure to oil futures was a dispute between Russia and Belarus, sparking fears that shipments of crude via the Druzhba oil pipeline would be disrupted.
The pipeline originates in Russia and traverses Belarus as it heads westward to markets in Ukraine, Poland, Hungary, Slovakia, Czech Republic, and Germany. It forks into Northern and Southern branches in Belarus; the Northern branch terminates in
Bullish sentiment was also evident for natural gas prices, which increased nearly six percent Monday. The daily settlement for February 2010 Henry Hub Natural Gas Futures was $5.88 per thousand cubic feet; the settlement price for the previous trading day last Thursday was $5.57.
Cold weather conditions are expected to continue well into January, suggesting more oil and gas price increases to come. The U.S. National Weather Service recently predicted below-normal temperatures for a large swath of the southern half of the country extending from West Texas to the Middle Atlantic States through mid-January. In addition, the outlook for below-normal temperatures throughout the Midwest and Northeast is 50/50 during the forecast period.
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