NEW YORK — Oil prices jumped above $19 a barrel Monday for the first time in nearly a year, bolstered by a cold wave that gripped Europe with record low temperatures.
Traders said prices also were boosted to a lesser extent by the latest escalation of the war between Iran and Iraq.
In trading on the New York Mercantile Exchange, the February contract for West Texas Intermediate, the U.S. benchmark crude oil, jumped 24 cents a barrel to $19.01 from Friday's closing level of $18.77. It was the highest closing price on the exchange since Jan. 30, 1986.
Heating oil for February delivery increased 1.65 cents a gallon to 54.66 from 53.01 cents, while unleaded gasoline rose just under half a cent to 52.35 cents a gallon from 51.87 cents.
Prices had already been rising since late December, when oil ministers of the 13-nation Organization of Petroleum Exporting Countries agreed to cut their overall production by 7.6% during the first half of 1987 and to set an average price of $18 a barrel.
In the weeks before the meeting, crude had been trading at levels between $14 and $16 per barrel. A barrel is the equivalent of 42 gallons.
On Monday, analysts said traders bid up prices as a result of the frigid weather that has gripped Europe for three days.
"The demand there is pushing up the crude market," said Stephen J. McKiernan, president of McKiernan & Co., a firm that trades oil futures on the Mercantile Exchange.
Peter Beutel, assistant director of the energy group at Elders Futures Inc., said there was concern in Western Europe that the freezing weather could block the movement of heating oil on the Rhine River.
In addition, most of the heating oil currently available in Europe is oil from the Soviet Union that takes on a thick, mud-like consistency in cold weather and must be heated in order to be poured, he said.
Beutel said that because of the problems in Europe, heating oil prices are currently about 15 cents a gallon higher in northwest Europe than in the U.S. Gulf Coast area, encouraging traders to divert some of the U.S. product to Europe.