Oil prices fell Wednesday amid expectations that a US government report will show increases in fuel stockpiles, but remained supported by robust heating demand due to frosty weather in the Northern Hemisphere. US oil futures fell 83 cents. or 1.7 percent, to $47.55 a barrel after a round of profit-taking knocked the market off its Tuesday peak of $49.50, the highest level since November 30. London Brent crude was down 68 cents at $44.70.
The losses came ahead of a weekly report from the US Energy Information Administration expected to show small increases in national petroleum stockpiles.
Prices are still almost 10 percent higher since the year started, boosted by the approach of the season's severest cold snap in the US Northeast, the world's biggest heating oil market.
Temperatures in the region will be as much as 15 to 25 degrees Fahrenheit (8 to 13 degrees Celsius) below normal this week, though they are expected to return to seasonal norms by the end of the month, forecasters Meteorlogix said on Wednesday.
Dealers fear a sustained frosty spell could strain supplies, even if stocks rose slightly.
"Distillates should get in one more, smaller build before the seasonal downtrend takes hold on the back of the cold," said Tim Evans, senior energy analyst at IFR Energy Services in New York.
Inventories of distillates - which include heating oil and diesel - were forecast to have risen by 300,000 barrels in the week to January 14, the third consecutive build, according to a Reuters survey.
Crude oil and gasoline tanks, which are comfortably above last year's levels, were both seen building by 900,000 barrels.
Winter kerosene stocks in Japan - the world's third biggest oil user - fell nearly 12 percent in the last week as a mid-winter chill swept the north of the country, industry data showed Wednesday.
With oil prices again flirting with $50 a barrel and lingering supply outages around the globe, the International Energy Agency has called on the Organisation of the Petroleum Exporting Countries (Opec) to pump more oil.
Demand for the cartel's crude will be 500,000 barrels per day (bpd) more than expected in the first quarter due to field disruptions in North America and the North Sea, some of which are still ongoing, the IEA said.
Opec President and Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah said Wednesday that the current high prices were the result of the US cold snap and winter demand and that the production group will ensure global markets are adequately supplied.
Opec meets on January 30 to discuss whether it may need to deepen its 1-million-bpd January 1 cuts ahead of the second quarter, when demand ebbs.
Iraq goes to the polls on the same day as the cartel's meeting, keeping traders on high alert for potential disruptions to its 1.5 million bpd of southern exports, which have been mostly spared the sabotage that has paralysed northern supplies.
Sabotage on Iraq's northern pipeline is expected to keep oil exports through Turkey at a standstill for another two to three weeks, an Iraqi oil official said Wednesday.
Elsewhere supplies were recovering, with Nigerian flows nearly back to normal and Norwegian output coming back on stream, although nearly 250,000 bpd of production from the North Sea and the US Gulf of Mexico remains off line.