Oil jumped 3 percent to $59 a barrel on Friday, stoked by cold weather in top consumer the United States and concerns over supply from Iran and Nigeria. US crude gained $1.72 to $59.02 a barrel, the highest settle price since January 2. London Brent crude moved $1.69 higher to $58.41.
Threats of a strike by oil unions in Nigeria, the world's No 8 exporter, over increased violence from militants in the oil-producing Niger Delta helped spur prices higher. Further support came rising tensions between the United States and Opec member Iran, which Washington accuses of interfering in Iraq and seeking to develop nuclear weapons.
Tehran says it is developing a nuclear program for peaceful purposes. Supply concerns from Iran and other big producer helped push prices to records over $78 a barrel in July. "The risk-premium is re-emerging into the mix," said Mike Wittner of investment bank Calyon. "Just following the news flow, there's been a lot more coming out of Iran and Nigeria is simmering away."
Oil is down 5 percent since the start of the year, but has recovered from a rout sparked by warm winter weather that knocked 18 percent off the price, which sank to $49.90. Exceptionally mild weather helped build inventories in the US Northeast, the world's largest heating oil market, before belated cold weather began to eat into stockpiles.
US data on Wednesday showed stocks of distillates, including heating oil, fell more than expected last week. Forecasters said on Friday the coldest weather of the season could hit the US Northeast this weekend. Output cuts from the Organisation of the Petroleum Exporting Countries, source of more than a third of the world's oil, have also helped boost prices.
Opec has pledged to reduce supply by half a million barrels per day (bpd) from February 1 in addition to a 1.2 million-bpd cut that took effect from November. A Reuters survey showed supplies from group fell 160,000 bpd in January to 840,000 bpd below production levels in October before the first wave of cuts came into effect.
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