London Brent crude prices edged up on Thursday as colder weather in the northern hemisphere improved demand for heating, offsetting a more comfortable US inventory picture.
Brent crude for January gained 14 cents to $56.35 a barrel, after closing 20 cents down on Wednesday. US light crude futures in New York were closed for the Thanksgiving holiday, after closing 13 cents down on Wednesday at $58.71.
"Energy demand for heating will be near to above average in the next few days," said forecaster Meteorlogix in a European weather outlook on Thursday, adding temperatures in Northwest Europe would be 2-8C below normal in the next five days.
IPE gas oil in London, used to price heating oil in Europe, rose $3.25 to trade at $509 a tonne. Prices were pressured on Wednesday after US government data showed distillate stocks, including heating oil, had risen by 1.1 million barrels to 124.5 million barrels, up 3.4 million barrels from the same time a year ago, and more than the 800,000-barrel increase forecast by analysts.
The data also showed a 400,000-barrel increase in crude oil stocks, bringing them more than 34 million barrels above last year, and a 200,000-barrel rise in gasoline inventories.
"US weekly data was again constructive for gasoline and less constructive for heating oil," said Barclays Capital in an energy report.
An unusually mild start to the winter has so far boosted heating oil supplies, but freezing temperatures this week have increased demand and pulled US crude prices up from a five-month low of $56.80 touched on Friday.
Ministers of the Organisation of the Petroleum Exporting Countries, which has been pumping at full throttle, have said they will not consider an output cut at their meeting in Kuwait on December 12 unless prices fall sharply.
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