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The Canadian Press - ONLINE EDITION

Oil extends gains above $100 as cold weather in the US supports demand for heating fuels

Oil pumps work Jan. 14, 2014, in the Persian Gulf desert oil field of Sakhir, Bahrain. THE CANADIAN PRESS/AP, Hasan Jamali

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Oil pumps work Jan. 14, 2014, in the Persian Gulf desert oil field of Sakhir, Bahrain. THE CANADIAN PRESS/AP, Hasan Jamali

The price of oil extended gains above $100 a barrel Monday as the cold weather in the United States increased demand for heating fuels and solid Chinese credit numbers eased concerns over the world's second-biggest economy.

By midday, benchmark U.S. crude for March delivery was up 62 cents to $100.92 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the Nymex contract fell 5 cents to close at $100.30.

"The ongoing cold weather in the U.S. is continuing to lend support to energy prices," analysts at Commerzbank in Frankfurt said in a note to clients.

They added that prices are likely to correct, possibly as much as several dollars, once the cold weather abates, as happened at the start of last year.

For now, though, oil prices have been supported by favourable credit growth numbers from China, which suggested the Chinese economy is not suffering a dramatic slowdown.

Lending by Chinese banks and in the largely unregulated underground market rebounded to 2.6 trillion yuan ($430 billion) in January from December's 1.2 billion yuan, according to the central bank. Lending usually surges at the start of a new year but January's rise exceeded forecasts and might help to ease worries about cooling retail sales, manufacturing and other activity.

Brent crude, which is used to set prices for international varieties of crude, was flat at $109.18 on the ICE Futures exchange in London.

In other energy futures trading in New York:

— Wholesale gasoline rose 2 cents to $2.82 per gallon.

— Heating oil added a penny to $3.09 per gallon.

— Natural gas jumped 24 cents to $5.45 per 1,000 cubic feet.

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