Oil stays above $71 in Europe amid cold snap in US northeast, stronger dollar, Iran tensions

Oil above $71 amid US cold snap, Iran tensions

Oil prices held above $71 a barrel Monday after hitting a two-month low last week, boosted by tensions over Iran’s nuclear program and a cold snap in the U.S. northeast.

Gains were kept in check by the strengthening U.S. dollar, which made crude more expensive for investors holding other currencies.

By early afternoon in Europe, benchmark crude for March delivery was up 19 cents at $71.38 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, it peaked at $72.39.

On Friday, the contract plunged $1.95 to settle at $71.19.

Oil prices fell sharply late last week as concerns over swelling debt levels in Greece, Portugal and Spain and high unemployment in the U.S. cast doubt over the global economic recovery.

Helping crude rebound Monday were expectations of a spurt in demand for crude products like heating oil because of a cold spell in the U.S. and tensions in the Middle East.

Still, analysts were skeptical about even the normally bullish blizzards.

“The U.S. East Coast has been under a very severe snowstorm over the weekend, but given the shutdown of many of the transport systems, the storm should actually be negative to the total petroleum demand picture,” said Olivier Jakob of Petromatrix in Switzerland.

Iran’s president Mahmoud Ahmadinejad ordered Sunday his atomic agency to significantly enrich the country’s stockpile of uranium, defying pressure from Western nations to halt its nuclear program.

“This is winter’s last hurrah, while Iran’s announcement also gives an excuse for investors to buy,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.

In other Nymex trading in March contracts, heating oil fell 0.08 cent to $1.8740 a gallon, and gasoline was up 0.05 cent at $1.8869 a gallon. Natural gas rose 10.4 cents to $5.619 per 1,000 cubic feet.

In London, Brent crude was up 17 cents at $69.76 on the ICE futures exchange.

Associated Press writer Chun Han Wong in Singapore contributed to this report.