The price of oil rose nearly 2 percent Wednesday, as oil started flowing through a new pipeline to the Gulf Coast and traders anticipated another decline in U.S. supplies.
Meanwhile, natural gas futures shot up almost 6 percent as temperatures in many parts of the Northeast dropped into the single digits, and strong demand tapped the region’s supplies of natural gas.
Benchmark U.S. crude for March delivery rose $1.76, or 1.9 percent, to close at $96.73 a barrel on the New York Mercantile Exchange. Oil last closed above $96 a barrel on Dec. 31.
Oil prices were boosted by the opening of the southern leg of the Keystone pipeline, which is expected to eventually bring 500,000 barrels of crude oil a day to the Gulf Coast. With demand expected to rise, the price of the oil rose closer to that of more-expensive imports.
Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending Jan. 17 is expected to show a decline of 1.9 million barrels in crude oil stocks and an increase of 1.7 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
Natural gas rose to the highest level since June 2011, as a deep chill enveloped states from South Dakota to Maine. Demand for natural gas is expected to remain high as the frigid air stays in place and some schools and businesses reopen Thursday following Tuesday’s big snowstorm.
Natural gas jumped 26 cents, or 5.9 percent, to $4.69 per 1,000 cubic feet.
Brent crude, used to set prices for international varieties of crude, gained $1.54, or 1.4 percent, to $108.27 on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
- Wholesale gasoline added 6 cents to $2.68 a gallon.
- Heating oil gained 2 cents to $3.04 a gallon.