Oil Trades Near 14-Month High on Cold Snap, Economic Outlook

“Oil really got a boost from a string of upbeat manufacturing readings from the U.S., China and India,” said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. “It has been a cold winter across a lot of the Northern Hemisphere, which has boosted demand for heating fuels and is expected to draw down the ample distillate stockpiles.”

Crude oil for February delivery was at $81.76 a barrel, up 25 cents, in electronic trading on the New York Mercantile Exchange at 2:48 p.m. Singapore time. Yesterday, the contract rose 2.7 percent to $81.51 a barrel, the highest settlement since Oct. 9, 2008.

U.S. distillate fuel inventories probably fell a fourth week, according to a Bloomberg News survey before an Energy Department report tomorrow. Stockpiles including heating oil and diesel dropped 1.78 million barrels last week, based on the median estimate from 10 analysts polled.

The Climate Prediction Center of the National Weather Service forecast below-normal temperatures from Texas to Maine through Jan. 17. The Northeast consumes about four-fifths of the country’s heating oil.

U.S. Expansion

The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the U.S. economy, rose to 50.5 in December from 48.7 in November, a Bloomberg News survey showed before tomorrow’s report.

Yesterday, the Tempe, Arizona-based group said its factory index, representing U.S. manufacturing, climbed to 55.9 in December, the highest level since April 2006. Readings greater than 50 signal expansion.

The greenback fell to the lowest in almost three weeks against the euro before reports today that economists said will show U.S. factory orders rose for a third month. The dollar dropped to $1.4463 per euro from $1.4413 after weakening to $1.4473, the weakest since Dec. 17.

Brent crude oil for February settlement was at $80.34 a barrel, up 22 cents, on the London-based ICE Futures Europe exchange at 2:49 p.m. Singapore time. Yesterday, the contract gained 2.8 percent to $80.12 a barrel, the highest settlement since Oct. 9, 2008.