Crude-oil futures rose early Monday, tracking gains in natural-gas futures, amid forecasts for below-average temperatures across much of the U.S.

Crude for February delivery was last up 50 cents at $52.49 a barrel. The contract gained 3% on Friday, also buoyed by a rally in natural gas triggered by the onset of cold temperatures.
National Weather Service forecasts are calling for below-normal temperatures across the eastern third of the nation as well as parts of the South.

Natural-gas futures were last up 38.9 cents, or 5.7%, at $7.275 per million British thermal units, their highest level since Dec. 20.

Still, oil’s price gains are tentative at best, with the technical picture in most of the energy markets remaining poor, according to Edward Meir, analyst at Man Financial.

“It seems that the only factor holding the market higher and dissuading the bears from reinstituting short positions at this stage is the colder weather in the U.S.,” he said. “This, while certainly not insignificant, cannot be counted on to provide indefinite support, especially if the weather readings start to change. ”

The selling may well resume later this week if data on supplies fail to show a real impact from the cold spell that set in last week, said Meir.

The February oil-futures contract will expire at Tuesday’s close, “so we could be in store for a potentially choppy couple of days,” he said.

Meanwhile, there was more bad news from Iraq over the weekend, with 75 people reported to have been killed in a double car bombing in Baghdad. A further 160 people were injured in the blasts at a market, the BBC reported.

It was the second major attack in less than a week — about 70 people were killed in a bombing outside a Baghdad university a week ago. It comes as U.S. troops begin to arrive in Iraq as part of President Bush’s new plan to restore order to the country.

On Saturday, 25 American soldiers were reported to have been killed in attacks across the country.

Reformulated gasoline futures were up 0.4 cent at $1.4020 a gallon and heating oil rose 0.4 cent to $1.5175 a gallon.

source : MarketWatch

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