Oil rises above $73

Oil rose to settle more than 2 percent higher on Tuesday, buoyed by a weaker US dollar, gains on Wall Street, and a storm approaching the US Northeast. US crude prices for March delivery rose $1.86 to settle at $73.75 a barrel, after hitting an intra-day high of $74.15. At the end of last week, prices briefly dipped below $70 a barrel to the lowest level since mid-December.
ICE Brent crude settled at $72.13, up $2.02. The US dollar slipped from an 8-1/2 month high against the euro on Tuesday after reports of an aid plan for the struggling Greek economy. "The bottom line is that the dollar had been getting stronger on concern over Greece, Portugal, Spain and now that it looks like something is going to be done to take care of those problems, the dollar sold off today and the stock market rallied," said Peter Beutel, president, Cameron Hanover, New Canaan, Connecticut.
Oil tends to rise when the dollar falls, making crude and petroleum products cheaper for non-dollar buyers. Weakness in the dollar also encourages investors to move into more tangible investments such as commodities. Heating oil futures led the oil complex gains on Tuesday as snowy conditions in the US Northeast, the world's top heating oil consumer, was expected to boost demand for the fuel.
The snowstorm, the second to hit the US East Coast in the past week, shut US government offices in Washington for the second day on Tuesday. Heating oil demand is expected to be 7.6 percent above normal this week, the National Weather Service said on Monday.
"The cold weather and the uncertainty of whether people will be able to make it to work lent a little bit of urgency to some of the short-covering today," Cameron Hanover's Beutel said. Geopolitical tensions over Iran's nuclear program also helped to underpin oil prices, analysts said. The United States on Tuesday called for a UN sanctions resolution on Iran within weeks after Iran announced that work had begun to make higher-grade nuclear fuel.
The market will later look to the release of the weekly US oil inventory data from the American Petroleum Institute and the Energy Information Administration. US crude oil inventories likely rose last week by 1.5 million barrels and distillates fell 1.9 million barrels, a Reuters poll of 16 analysts showed Tuesday.