x Abu Dhabi, UAEFriday 28 July 2017

Crude sets two-month high

On the first day of trading in the new year, crude has reached a two-month high on a new threat to Europe's oil supply and continued cold weather in North America.

On the first day of trading in the new year, crude has reached a two-month high on a new threat to Europe's oil supply and continued cold weather in North America. Crude touched US$81.16 today in electronic trading on the New York Mercantile Exchange, blasting through the $80 barrier from which it shrank on December 31. Traders said yesterday that Russia had halted oil supplies to refineries in Belarus, after the two states failed to agree on contract terms for this year and a deadline passed for an agreement on export duties.

While oil flows to Germany and Poland through Belarus continued as normal, there were concerns of a spillover from the dispute in a reprise of previous spats involving transit states that have disrupted Russian fuel supplies to Europe. "The Russia supply issue to Belarus isn't a big impact on the market at the moment, but it's an uncomfortable reminder that the issue could blow up," Ken Hasegawa, a commodity derivatives manager at Newedge in Japan, told Reuters.

In the US, the National Weather Service forecast below average temperatures for the heavily populated eastern half of the country until January 13, raising expectations of higher than normal demand for heating oil. US stockpiles of the fuel have fallen for the past six weeks, government data showed. tcarisle@thenational.ae