US oil prices rose to a fresh eight-week high on Tuesday, supported by news of a fire at a big Louisiana refinery that has slowed the plant's fuel production. The gains built on recent strength from a cold snap in the Northeast that has fired up furnaces in the world's largest heating oil market and trader jitters ahead of an Opec production policy meeting January 30.
NYMEX crude oil jumped 79 cents to $49.60 a barrel, the highest level since November 30. London Brent gained 98 cents to $46.99 a barrel, the highest since November 4.
Dealers said the strength tracked a rally in gasoline futures after ConocoPhillips confirmed it had been forced to slow production at its Belle Chasse, Louisiana, refinery after a fire on the weekend.
NYMEX gasoline futures surged 4.10 cents to $1.34 a gallon near the close of trade.
"All of this has kept us with a bullish bias," said Tom Bentz of BNP Paribas. "The cold really helped early in the week, and today there were a few refinery issues."
Oil prices have been climbing steadily in recent weeks as arctic cold finally blew into the US Northeast, boosting demand for heating oil.
US supplies of the key winter fuel were running about 4 percent below last year, according to the most recent government figures.
Below-normal temperatures are expected to last another week before a thaw gives the market a reprieve. Forecasters are calling for a warmer-than-normal February and March.
The market on Tuesday also drew support from concern about attacks on Iraq's oil infrastructure with the election there approaching and production disruptions from Nigeria.
Iraq's southern crude supplies have run relatively smoothly at about 1.5 million barrels per day (bpd) in the lead up to the elections, though the country's northern exports have been halted for more than a month.
Royal Dutch Shell Group said Tuesday it shut 35,000 barrels per day of crude oil production in Nigeria's south-eastern Abia state following community protests.
Talks to avert a planned strike by Nigeria's main oil unions were adjourned to Wednesday after failing to resolve a dispute over alleged police harassment of local workers, union leaders said on Tuesday.
Oil traders are also on alert for any surprises on January 30, when the Organisation of the Petroleum Exporting Countries meets to debate production policy.
Opec members look to be moving toward a rollover in the cartel's output ceiling as prices hovering near $50 make it unlikely the group will tighten its taps, despite fears of a potential oversupply in the second quarter.
Kuwait's Oil Minister Sheikh Ahmad al-Fahd al-Sabah said on Tuesday that Opec should keep its output unchanged as prices remain high and stocks are not building too fast.
Prices are a long way above the $35 level that the Kuwaiti minister said was Opec's preferred level.
Opec production fell 800,000 bpd in January as producers implemented their agreed 1 million bpd cut, tanker tracker Petrologistics said in a preliminary estimate.
China's economy, a driving force behind last year's surge in oil demand, expanded by 9.5 percent in the year through the fourth quarter, beyond analysts' expectations.
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