Oil prices rose in London today, supported by fears that OPEC could cut production next month, even amid colder weather in the US northeast and Europe, analysts and traders said.
In London, the price of Brent North Sea crude oil for delivery in April gained 54 cents to $46.88 a barrel in late deals. New York's main contract, light sweet crude for delivery in March, had closed up 81 cents to $48.35 a barrel on Friday.
Heavy New York buying had been sparked by a cold wave hitting the US northeast - a major consumer of heating oil - and traders wanting to avoid being short ahead of a three-day US holiday weekend. Prices continued to gain today, also because of colder weather across Europe.
Analysts said that crude prices were winning support on indications from OPEC that a sharp price fall on the market or a rapid US stock build would put a supply cut on the agenda for the cartel's next meeting in Iran in March.
The Centre for Global Energy Studies (CGES) predicted in its monthly report that oil prices would break $50 a barrel in London by the middle of the year should OPEC decide next month to reduce output by at least 500,000 barrels per day.
'Without a significant increase in commercial oil inventories over the two summer quarters, capacity limits throughout the supply chain will send prices soaring,' the study said.
Traders, meanwhile, were keeping a close watch on major oil producer Venezuela, OPEC's only Latin American member.
Venezuelan President Hugo Chavez had threatened on Sunday to suspend oil exports to the US if someone tried to assassinate him, adding that US President George W Bush would be to blame. Venezuela sells about 1.5 million barrels daily to the US, nearly as much as Saudi Arabia.
