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Oil prices near US$103 on supply concerns

The price of oil extended gains to near US$103 a barrel Wednesday, driven by severe winter weather in the U.S. and supply concerns.

Benchmark U.S. crude for March delivery was up 38 cents to US$102.81 a barrel at 0800 GMT in electronic trading on the New York Mercantile Exchange. The contract surged US$2.13 to close at US$102.43 a barrel on Tuesday.

Last time the price of oil was above US$103 was in October.

Severely cold weather and snowstorms in the eastern region in the U.S. have boosted energy prices. The National Weather Service said more snow is ahead for residents of northern New England, one day after a storm dumped about a foot on many communities.

One half of U.S. households use natural gas as their primary heating fuel and about a quarter of households in the Northeast U.S. rely on heating oil for space heating, according to the Energy Information Administration. The EIA is scheduled to release its weekly inventory data on Thursday.

Meanwhile, expectations for an increased oil supply were dampened after Iran rejected a key demand of six world powers in their latest round of talks. The talks that began on Tuesday in Vienna aim to finalize a deal to control Iran's nuclear program. Iran, a major oil producer, will be able to export more crude if the talks lead to reduced sanctions.

Brent crude, a benchmark for international oils, edged down 11 cents to US$110.35.

In other energy futures trading on Nymex.

— Wholesale gasoline edged up 0.3 cent to US$3.003 a gallon.

— Heating oil inched down 0.2 cent to US$3.044 a gallon.

— Natural gas gained 12 cents to US$5.671 per 1,000 cubic feet.

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