The price of oil closed above $102 a barrel Tuesday on expectations that cold weather in the U.S. and steady Chinese growth will underpin demand.
Benchmark U.S. crude for March delivery closed up $2.13 to $102.43 a barrel on the New York Mercantile Exchange.
At the gas pump, the average price of a gallon of gasoline is $3.37. That’s up 6 cents from a week ago, and down 36 cents from this time last year.
Severe cold weather has been boosting energy prices, with a prolonged wave of snow and cold temperatures hitting the East Coast most of the winter.
“Another snowstorm in the U.S. is likely to keep heating demand at a high level and spark a further decline in the already severely diminished stocks of heating oil and natural gas,” said analysts at Commerzbank in Frankfurt in a note to clients.
Optimism that China’s economy is still healthy after credit growth increased in January also helped lift energy prices.
Meanwhile, a new round of talks began Tuesday between Iran and six world powers on finalizing a deal to control Iran’s nuclear program. The outcome could have an effect on oil prices as Iran is a major oil producer and reduction of sanctions would allow the country to export more of its crude.
A weaker dollar also supported oil prices by making commodities like oil cheaper for traders using other currencies. On Tuesday, the euro was up 0.3 percent at $1.3747.
Brent crude, a benchmark for international oils, rose $1.28 to $110.46 barrel on the ICE Futures exchange in London.
Among other March futures contracts trading on Nymex:
— Wholesale gasoline rose 3 cents to $3 a gallon.
— Heating oil added 3 cents to $3.04 a gallon.
— Natural gas gained 34 cents to $5.55 per 1,000 cubic feet.