EIA: Oil cost won’t rise to $70/bbl anytime soon

WASHINGTON (Reuters) – A prolonged period of colder-than-normal winter temperatures may put a dent in heating oil supplies and drive up U.S. oil prices, but crude costs won’t hit $70 a barrel in the near future, the federal Energy Information Administration said on Wednesday.

“However, absent oil supply disruptions, any increase in price will likely be of a smaller magnitude than that seen earlier this year, and the price of West Texas Intermediate crude oil is not expected to reach $70 per barrel … anytime soon,” the EIA said in its weekly review of the oil market.

The price of U.S. oil was up 42 cents at $62.85 a barrel in midday trading at the New York Mercantile Exchange after EIA data showed a draw in weekly U.S. crude oil and heating oil inventories.

The EIA said higher heating oil demand that will result from much colder weather will require refiners to make more heating oil to either meet increased demand or replenish inventories.

Reuters