Oil stays above $98 as data signal stronger U.S. demand

The price of oil was little changed Friday, remaining above US$98 a barrel as signs of stronger recoveries in the U.S. and Japan prompted expectations of greater demand for crude.

Benchmark U.S. crude for March delivery lost 21 cents to $98.02 at 12 a.m. ET in electronic trading on the New York Mercantile Exchange. The contract gained 87 cents to settle at $98.23 a barrel on Thursday.

Japan reported that factory output rose in December and the consumer price index rose 0.4 per cent in 2013, the first increase in five years, in further evidence the world’s third-largest economy is gaining strength.

News the U.S. economy grew at a 3.2 per cent annualized rate in the last quarter thanks to stronger consumer spending has reaffirmed expectations that 2014 will be the best year since the recession ended 4 1/2 years ago.

Extremely cold weather in the U.S. has pushed up demand for heating oil this winter, tightening supplies of distillate fuels, including heating oil, to about a fifth below five-year averages: Heating oil futures fell 1 cents to $3.04 a gallon. They have gained 10 cents since Jan. 14.

Forecasts for milder temperatures have pushed natural gas prices sharply lower after they rose earlier this week to levels last seen four years back. Futures fell 13 cents, or 2.6 per cent, to $4.88 per 1,000 cubic feet.

Brent crude, used to set prices for international varieties of crude, fell 4 cents to $107.91 a barrel on the ICE exchange in London.

In other energy futures trading in New York:

• Wholesale gasoline was up 1 cent at $2.684 a gallon.