Oil prices hit new 2014 peaks

Written by PTI | London | Updated: Feb 20 2014, 16:16pm hrs
Oil PricesOil prices hit new 2014 peaks. (Reuters)
The oil market struck the highest level so far this year today on the back of US winter weather and geopolitical tensions, but trimmed gains on poor housing data.

New York's main contract West Texas Intermediate (WTI) for delivery in March surged to a four-month high at USD 103.34 a barrel. It later stood at USD 102.82, up 39 cents from yesterday.

Brent North Sea crude for April rallied to USD 110.82, its highest point since the start of 2014.

The contract later pulled back to USD 110.38 in early afternoon London deals, down eight cents.

"WTI crude oil momentarily came under a bit of pressure in the aftermath of some shocking housing data from the US," said analyst Fawad Razaqzada at trading site Forex.com.

He added: "However the US oil contract managed to claw back some of its losses, apparently as investors once again blamed the cold weather for this latest data miss."

US data showed an unexpectedly big decline in new home construction and building permits in January.

Housing starts in the US sank 16.0 per cent from December to a seasonally adjusted annual rate of 880,000, the Commerce Department said, well below analyst forecasts of 963,000.

Building permits dropped 5.4 per cent to 937,000, below the 980,000 forecast.

Analysts have somewhat downplayed economic data for December and January, believing that unusually cold weather in much of the US has depressed economic activity.

The oil market was buoyed today by hopes of strong heating fuel demand in the winter-struck United States, alongside simmering tensions in Africa and Venezuela.

"Brent crude held above USD 110 a barrel, underpinned by geopolitical concerns in Africa and Venezuela, while US oil touched its highest in four months as stockpiles are forecast to fall on winter demand and new pipeline capacity," wrote Investec oil analysts in a note to clients.

Crude futures had also surged yesterday with cold weather in the United States pushing demand for heating fuel higher.