Oil prices hover near recent highs
(Agencies)
Updated: 2005-02-24 16:03

Oil prices hovered near recent highs above $51 a barrel on Thursday, held up by expectations of continuing cold weather in the United States that should boost demand for thinning heating oil inventories.

U.S. crude oil rose 28 cents to $51.45 a barrel, holding near Wednesday's near four-month high of $51.60 ahead of U.S. weekly inventory data. Brent crude on the International Petroleum Exchange (IPE) gained 17 cents to $48.68 a barrel.

Prices have soared by about $6 in the past two weeks, fueled by tightening global oil market forecasts this year, fears of an OPEC production cut and colder northern-hemisphere weather.

U.S. heating oil futures also surged, with the March contract up 19 points at $1.4850 having hit a new three-month high of $1.4880 a gallon.

The market will now look toward U.S. inventory data at 10:30 a.m. EST for direction, with a Reuters poll of analysts expecting a 1.8 million-barrel fall in distillate stocks and a 600,000-barrel build in crude inventories.

Heating oil supplies are running 9 percent below year-ago levels and dealers fear persistent cold weather in the U.S. Northeast could strain supplies.

Yet with high prices, OPEC officials have changed their focus from a possible production cut -- meant to head off an overly large second-quarter stockbuild -- to potentially raising output to cool prices within sight of last year's all-time high of $55.67.

"If the prices rise further there will be a reaction from OPEC to help lower these prices," said Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah, also OPEC's president.

An Iraqi oil pipeline into Turkey, which was hit by sabotage last week, was expected to start pumping within a week, but this barely helped to calm market nerves.

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