Oil prices held above $46 a barrel on Monday, supported by a blast of freezing weather in the United States and renewed threats by Muslim militants to attack oil facilities in the major exporting Middle East region. US light crude for January delivery, which expires at the end of business in New York on Monday, dipped 23 cents to $46.05 a barrel. The February contract fell 19 cents to $46.38.
London's Brent crude fell 29 cents to $43.10 a barrel.
Oil rallied more than $5.50 a barrel last week, and is now less than $10 below the all-time high at $55.67 from late October, after an abrupt turn to wintry weather in the US Northeast, home to about 78 percent of American heating oil consumers.
A rise in demand threatens to drain already thin stockpiles of heating fuels, which are running nearly 13 percent below year-ago levels.
"If there's more cold weather, prices could click another dollar or two higher. Distillate demand numbers are pretty strong and people are worried by stocks," said David Thurtell at Commonwealth Bank of Australia in Sydney.
But dealers also are edgy on new security threats against oil infrastructure in the Middle East, which holds almost two-thirds of global proven reserves and accounts for almost 30 percent of global supplies.
An Internet statement at the weekend, purportedly from the Saudi wing of al Qaeda, urged militants to attack oil facilities in the world's biggest exporter. "We call on all the Mujahideen in the Arabian Peninsula to unify their ranks and target the oil supplies that do not serve the Islamic nation but the enemies of this nation," said the statement from the al Qaeda Organisation in the Arabian Peninsula dated December 18.
The statement came two days after al Qaeda leader Osama bin Laden, in an audio message posted on the Internet, urged fighters loyal to his network to strike Middle East Gulf and Iraqi oil infrastructure, saying it was the most powerful weapon against the United States.
State-run Oil Company Saudi Armco said on Saturday that its oilfields and refineries were guarded by "multiple levels" of armed company security personnel closely working with government security forces.
Saudi Arabia is battling a 19-month wave of violence by supporters of the al Qaeda movement. Gunmen have killed foreigners in the Red Sea petrochemical hub of Yankee and the Oil City of al-Kohlrabi, but there have been no reports of direct attacks on oil facilities.
The country has suffered a series of attacks on its infrastructure by insurgents against the intervention of the United States since March 2003.
Ongoing outages in the United States, Nigeria, Canada and Norway are taking about 500,000 bpd of possible output off the market, leaving little leeway in global spare output capacity for any major supply disruption.
There appeared to be little immediate impact from Sunday's auction of the top core asset of Russian oil firm YUKOS, which was picked up by an unknown company, Biannual Finance Group, for $9.4 billion.
The sale of Yuganskneftegaz, which pumps more crude oil than Opec member Qatar, went ahead despite a US court order barring Gazprom, the favourite to win the asset, and its foreign bankers from bidding pending Yukon's application for US bankruptcy protection.
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