The price of oil briefly rose above $100 a barrel for the first time this year on rising demand for fuel and some positive sentiment about the U.S. job market.
Benchmark U.S. crude for March delivery gained $2.04, or 2.1 percent, to close at $99.88 a barrel the New York Mercantile Exchange. Oil climbed to $100.21 in the afternoon before dropping back. Oil last topped $100 on Dec. 30.
Energy analyst Stephen Schork said oil’s rise was brought about by rising prices for wholesale gasoline and low supplies of diesel and heating oil. That combination will encourage refiners to buy and process more crude oil.
“It’s a function of a products pulling crude,” he said. “The market needs product.”
Heating oil supplies have declined as a cold and snowy winter has homeowners constantly cranking up the thermostat. The Energy Department said Wednesday that supplies of distillates, which include heating oil and diesel, fell by 2.4 million barrels last week and are now 12 percent below year-ago levels. Heating oil futures gained 6 cents to $3.05 a gallon.
While some drivers have stayed indoors this winter, gasoline demand is turning out to be stronger than expected, Schork said.
Wholesale gasoline futures increased 7 cents to $2.75 and gained 15 cents, or 6 percent over the last three days.
That’s a sign that drivers can anticipate higher gasoline prices as the month goes along. Gasoline prices typically rise in February as refineries conduct seasonal maintenance and switch over to making summer blends of gasoline. That results in a loss of production and a decrease in gasoline supplies, which pushes up prices. Last year, gasoline hit its peak of $3.79 a gallon on Feb. 27. At the gas pump Friday, the average price for a gallon held steady at $3.27.
Oil was also pulled higher by a sharp rise in the U.S. stock market. While the Labor Department’s jobs report showed a relatively weak number of new jobs, the number of people in the job market rose, suggesting that people are feeling better about their prospects and that hiring was depressed by the bad weather. In mid-afternoon trading, the Dow Jones industrial average was up 154 points, or 1 percent.
Natural gas again fell sharply amid predictions of milder weather for the Midwest and Northeast. The price fell 15 cents, or 3 percent, to $4.78 per 1,000 cubic feet, bringing the two-day decline to 25 cents, or 5 percent.
Brent crude, used to set prices for international varieties of crude, rose $2.38, or 2.2 percent, to $109.57a barrel, the highest close since Dec. 31.