Oil prices rose strongly today as falling temperatures across the United States and Europe prompted traders to predict a sharp rise in demand for heating fuel during the northern hemisphere winter.
New York's main contract, light sweet crude for delivery in January, jumped 90 cents to $58.60 per barrel. In London, the price of Brent North Sea crude for January delivery rose 89 cents to $56.22 per barrel in electronic trading.
The US National Weather Service forecasts heating oil demand to be about 7% above normal this week as colder-than-normal temperatures arrive in the Northeast.
But price gains were expected to be limited by a healthier fuel stocks picture and assurances over crude supplies from the OPEC producers cartel.
Unseasonably warm temperatures in the past month have allowed the industry to replenish US stockpiles of crude and oil products depleted by the hurricane season, with demand for heating oil below normal levels in the past few weeks.
US inventory data due tomorrow is expected to show distillate stocks, including heating oil, gained 600,000 barrels, which would only be the second rise in nine weeks.
Rising stocks and fears that higher costs are curbing consumption have sent prices lower for nearly three months, taking them $13 below their end-August peak of $70.85.
OPEC producers have been pumping at top rates this year but exporters say they will not consider a cut at a meeting next month unless prices fall steeply.
The cartel next meets on December 12 in Kuwait to plot output policy for early next year.
