NEW YORK - Oil prices spiked above $79 a barrel yesterday for the first time in four weeks as an extended cold snap triggered an end-of-year rally in energy futures.
Benchmark crude for February delivery added 72 cents to settle at $78.77 a barrel in light, holiday trading on the New York Mercantile Exchange. Prices earlier yesterday rose as high as $79.12, the highest since Nov. 18.
Futures contracts for oil, natural gas, and heating oil have all become more expensive this month as snowstorms blanketed parts of the country and a sharp drop in supplies of crude and other fuels surprised traders.
More frigid temperatures are expected, with up to 4 inches of snow forecast for New England, and up to 7 inches of snow along the eastern shores of the Lower Great Lakes.
According to the latest data from the Energy Information Administration, natural gas prices jumped in early December to the highest since January, and heating-oil prices climbed during the middle of this month.
Still, the winter chill hasn't boosted energy demand from a year ago. The United States is consuming less petroleum than it did at the same time last year, when oil and gas prices were cheaper and the economy was in recession.