Oil prices have spiked amid plunging temperatures in the United States and fears of supply cuts. Freezing temperatures hit parts of the United States, driving up demand in the world's largest heating oil market for almost a weeek. Oil prices crossed US$49 a barrel and stand at their highest levels since November end. Weather reports indicate that temperatures to the east of the Great Lakes will remain below average from Jan. 22 through Jan. 26, and may stay lower than normal in the U.S. Northeast through Jan. 30.
On the supply side : Violence has broken out over the weekend in Kuwait; a shootout with suspected militants.. Repeated sabotage attacks on Iraq's northern pipeline infrastructure and power problems in the south have reduced exports. Worries that violence could escalate before elections, planned for Jan. 30, have added a premium. Making up for some of those shortfalls, production has resumed at the 140,000 bpd Draugen field in Norway.
OPEC ministers are scheduled to meet on Jan.30 to discuss whether additional production cuts may be necessary in the second quarter when oil demand usually falls as the northern winter ends.