Oil held steady on Friday after rallying a day before on forecasts for frigid weather in the US Northeast, which could boost fuel demand in the world's largest heating oil market.
US crude futures edged down 3 cents to $58.44 a barrel, after jumping $1.15 on Thursday. London Brent crude rose 4 cents to $56.19 a barrel, after also rising by more than $1 a day.
Private and government forecasters are expecting an arctic chill to hit the US East Coast by the end of the week and remain until mid-December, possibly shoring up demand for heating fuel after a warm spell.
This came after the UK government weather agency said this week there was a high probability of a colder-than-average winter in Europe this year. Heating fuel demand had been lagging and was mostly lower than normal over the past four weeks due to mild weather.
US heating oil inventories were around 10 percent above normal, government figures showed. "It's mainly the weather. Oil inventories will continue to fall toward the end of December.
And a cold spell is coming to the United States as we see the economy improving," said Naohiro Namura, the vice president at the derivatives business unit at Mizuho Corporate Bank.
Analysts said signs of a firming US economy were spurring market expectations of higher fuel use, providing support to oil prices. US consumer spending rose in October and factory output was robust in November, US Commerce Department figures showed on Thursday.
Despite on Thursday's rally, oil prices are still about $12 below its peak of $70.85 in late August.
Yet, the Organisation of the Petroleum Exporting Countries (Opec) appeared ready to keep pumping oil at nearly full capacity to rein in prices.
Top officials from Opec and the European Union will meet on Friday to discuss ways to stabilise oil markets before Opec meets on December 12 in Kuwait to chart policy for next year.
Some Opec officials have said the prospect of a cut in oil output is unlikely, unless the price of the cartel's reference basket of curds drops below $45.
The United Arab Emirates, a core Gulf Opec producer, 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.