Oil price surges as blizzards hit US

DIANE COYLE

Economics Correspondent

Blizzards that dropped up to 30 inches of snow on the East Coast of America took oil prices to an eight-month high yesterday.

The snows also kept the US financial markets closed for most of the day, although shares on Wall Street rose during the special three-hour trading session.

The Dow Jones industrials index ended nearly 10 points higher at 5,191.9, after a more buoyant start.

This had helped shares in London reach a record, with the FT-SE 100 index up just over 16 points at 3,720.6.

Federal workers in Washington were told to stay home because of the weather, on the first day of their return to work after the longest government shutdown in American history. However, politicians struggled into the office so that the frosty budget talks between the Clinton Administration and Republican leaders in Congress could continue.

The Federal Reserve announced that it would delay the publication of figures due out on consumer credit, while the Treasury Department postponed a $28bn auction until today. Currency and bond markets elsewhere were extremely quiet, taking their lead from the lack of US trading.

The only traders to get to work were those who lived in Manhattan, with main roads such as the New Jersey Turnpike closed. Most New York exchanges opened for three hours. The commodities exchange Nymex stayed closed all day.

The price of the benchmark Brent crude North Sea oil for February delivery rose by up to 26 cents, and was still up 18 cents at $19.23 a barrel in late trading. This followed a 37 cent surge on Friday, and an increase of 22 per cent since the beginning of October.

Leslie Nicholas, of Gerrard & National Intercommodities, said stocks of oil products were 85 million barrels below last year's levels, and lower than they were in 1993, one of the coldest winters on record.