Oil prices extended pre-weekend gains today as cold weather struck the US northeast, the world's biggest consumer of heating fuel, analysts said.
New York's main contract, light sweet crude for delivery in January, jumped by 68 cents to $60 a barrel in electronic dealing. In London, the price of Brent North Sea crude for January delivery gained 84 cents to $57.89 a barrel.
Analysts said that prices rose on expectations that falling temperatures in the US will boost demand for heating oil. Temperatures were set to hit -9 degrees Celsius this week in New York State, according to US forecasters.
Weather forecasters were predicting a prolonged cold snap in the US northeast, which consumes about 80% of the country's heating oil.
Inventories of US distillate supplies, which include heating oil and diesel fuel, jumped by 3.4 million barrels during the week that ended November 25, the Department of Energy said last week. Heating fuel stockpiles are now more than 12% higher than at the same stage last year.
The DoE data had caused oil prices to fall during the middle of last week, before predictions of a cold spell across the northern hemisphere, and in particular the US northeast, brought speculators back to the market.
Oil prices hit a record $70.85 a barrel on August 30 in New York after Hurricane Katrina severely disrupted energy production in the US Gulf of Mexico. However they then fell by about 20% after unusually mild US weather during October and much of November.
The Group of Seven rich countries, meeting in London over the weekend, said in a final communique that high and volatile oil prices would weigh on solid world growth.
