Cold Blast Drives Up Oil

Updated from 12:54 p.m. EST

Energy prices moved up Friday as snow hit the Northeast and forecasts indicated continuing cold weather for the weekend, suggesting demand will be higher for gas heat.

Prices for February-dated crude oil futures closed up $1.51 at $51.99 a barrel on the New York Mercantile Exchange. The February contract terminates Monday and so spot market activity now switches to the March contract, which closed at $53.40, up $1.59.

Other energy products were also up. Natural gas added 57 cents to $6.89 per million British thermal units. Heating oil was up 4 cents at $1.51 a gallon, and gasoline was ahead by 4 cents at $1.40 a gallon.

Despite the gains during the session, spot crude prices are now down from around $60 at year-end, and some observers say this is probably troubling decision-makers at oil companies.

"This must be causing the greatest angst, we suspect, among [producers], who must be watching the flashing red numbers with mounting worry," Edward Meir, an analyst at commodities broker Man Financial, wrote in a research report.

Providing an offset to the cold weather was a new downward revision to OPEC's oil demand forecast for 2007. The new projection calls for growth in demand of 1.3 million barrels a day, lower by 70,000 barrels from the previous estimate.

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