As yet another winter storm struck USA with snow, sleet and freezing rain, oil prices rose on expectations of a hike in heating fuel demand. Light, sweet crude for January delivery rose to US$91.77 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore.
Almost 12 inches of snow was seen in parts of Chicago area, and about 10 inches in Vermont. Winter storm warnings have been posted from Michigan and Indiana upto Maine. Meteorologists said 18 inches was possible in northern New England; more snow was still expected in parts of Michigan. Will rising inflation cut consumers' buying power and reduce demand for gasoline and oil? Higher inflation also means the Federal Reserve will stop cutting interest rates. Will this lead to create conditions akin to those created by the recent rate-cutting campaign that led to depressing the value of the dollar - a contributing factor behind the oil rise in November to record levels above US$99 a barrel.