Oil falls below $72/barrel

SINGAPORE (AP) — Oil prices lingered below $72 a barrel yesterday in Asia as investors remained uncertain about the strength of global economic growth and demand for crude.

Benchmark crude for March delivery was down 16 cents at $71.73 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained 70 cents to settle at $71.89 on Monday.

Investors are staying cautious as swelling debt levels in Europe, high unemployment in the US and fears of Chinese monetary tightening continue to cast doubt over the global economic recovery.

“Geopolitical tension, ongoing financial risks from Greece, Portugal and Spain and further liquidation of speculative long positions will continue to weigh on the oil price,” ANZ Banking Group said in a report.

Crude demand remains sluggish despite support from cold weather in the US northeast.

Analysts expect US crude stocks to grow two million barrels, according to a survey released Monday by Platts, the energy information arm of McGraw-Hill Cos.

In other Nymex trading in March contracts, heating oil fell 0.1 cent to $1.8845 a gallon, and gasoline was down 0.5 cent at $1.889 a gallon. Natural gas rose 3.9 cents to $5.44 per 1,000 cubic feet.

In London, Brent crude was down 18 cents at $70 on the ICE futures exchange.

 Meanwhile, in New York, Oil and other energy prices climbed Monday as another winter storm was expected to dump even more snow on the East Coast.

Benchmark crude for March delivery gained 70 cents to settle at $71.89 a barrel on the New York Mercantile Exchange, rebounding from an 8 percent drop last week. In London, Brent crude gained 52 cents to settle at $70.11 on the ICE futures exchange.

Already, parts of Virginia, Maryland, Pennsylvania and Washington are blanketed in about three feet (one meter) of snow, knocking out power for tens of thousands of Americans and forcing government offices to close.

As those regions dig out and warm up, analysts said they expected to see sizable draws on the US’s supply of natural gas and heating oil. Mid-Atlantic states are some of the biggest natural gas and heating oil consumers in the country.

Oil, heating oil and gasoline prices increased in response to the weather. But the contract for natural gas, which remains in huge surpluses in the US, slid nearly two percent. Energy experts said natural gas levels may drop in coming weeks, but there’s still much more than normal for this time of year.

“When you look at the supply numbers, it’s hard to get excited about natural gas,” PFGBest analyst Phil Flynn said. “Unless it stays cold between now and June we’re not going to have any supply problems.”

The National Weather Service said Monday that another storm could drop at least a foot (0.3 meters) of fresh powder on the beleaguered Mid-Atlantic. Forecasters said the storm will be strongest in central northern Maryland, northern Delaware, and parts of New Jersey and Pennsylvania.

Forecaster Bruce Sullivan said the agency doesn’t “really see any warm weather in sight.”