Oil: Price over US$59 on US cold, Opec keeps taps open

NEW YORK - A forecasted blast of cold weather in the United States shoved crude oil prices above US$59 a barrel despite further assurances from oil cartel Opec that it would pump flat out to fill fuel tanks this winter.
Private and government forecasters expect an arctic chill to hit the US East Coast by the end of the week and remain until mid-December, possibly shoring up demand for heating fuel after a warm spell.


With colder weather blowing into the US Northeast, the president of the Organisation of the Petroleum Exporting Countries said there was support in the cartel to keep output at current rates of some 30 million barrels per day (bpd).


Opec meets on Dec. 12 in Kuwait to chart oil policy for early next year and cartel chief Sheikh Ahmad al-Fahd al-Sabah said the group might keep pumping at these levels until March.


US crude futures rose 85 cents to close at US$59.32 a barrel in afternoon trade, after jumping US$1.15 on Thursday. London Brent crude rose 90 cents to US$57.05 a barrel, after also rising by more than US$1 the day before.


"Prices are again quite a bit higher as weather forecasts remain supportive," said Kyle Cooper, an analyst at Citigroup in Houston.


Signs of a strengthening US economy also spurred expectations of higher fuel usage and buoyed oil prices.


Oil prices are about US$12 below a US$70.85 peak in late-August despite the latest rally.


White House officials today reiterated their concern over high fuel prices, which have become a political liability to the administration of US President George W. Bush in recent months.


"He (Bush) is especially concerned about natural gas prices and the impact they're going to have on people's budgets this winter," White House economic adviser Al Hubbard said.


Forecasts of colder weather in the US Northeast came after the UK government weather agency said early this week there was a high probability of a colder-than-average winter in Europe this year.


Heating fuel demand had been lagging and was mostly lower than normal over the past four weeks due to mild weather. US heating oil inventories were around 10 per cent above normal, government figures showed.



- REUTERS