Oil prices jumped more than a dollar on Thursday as a cold blast swept into the US Northeast, rekindling demand in the world's biggest heating oil market after a prolonged warm spell kept furnaces idled.
US crude futures gained $1.15 to settle at $58.47 a barrel, bringing them more than $4 above the five-month low struck in mid-November, while London Brent crude oil rose $1.11 to $56.16 a barrel.
The gains came as private and government forecasters predicted colder-than-normal weather would sweep to the East Coast of the United States by the end of the week and linger into mid-December.
Heating fuel demand had been running mostly lower than normal over the past four weeks due to balmy temperatures, helping boost US heating oil inventories around 10 percent above normal, according to government figures.
Oil has lost nearly $13 from its end-August peak of $70.85, but the Organisation of the Petroleum Exporting Countries appeared ready to keep pumping nearly flat out to pile up yet more oil in world storage tanks.
Top officials from the Opec producer group and the European Union will meet on Friday to discuss ways to stabilise oil markets. The cartel then gathers on December 12 in Kuwait to chart policy for early 2006.
Some Opec delegates have said the prospect of a cut in cartel oil supply is unlikely, unless the price of Opec's reference basket of crudes drops below $45. The Opec basket is now $49.69.
Core Gulf Opec producer the United Arab Emirates said it considered $50 a fair price, while an oil official from Iran, the cartel's second-biggest producer, said even a slide toward $40 might be tolerated.
World oil prices had bounded higher on Wednesday after the US government reported a 4.2 million-barrel fall in crude stocks last week, far steeper than the forecast 100,000-barrel decline.
Crude stocks remain 10 percent higher than a year ago, but the large headline figure prompted some covering from speculators who had built up their biggest crude oil short positions in two and a half years by mid-November.
"Market participants responded just to the figure that showed a drop in crude supply," said Hiroyuki Kitakata, director of commodities business at Barclays Capital Japan.
Heating oil lagged the gains after distillate stocks shot 3.4 million barrels higher, including a 1.5 million-barrel rise in heating oil inventories, now 12 percent above 2004.
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