Oil prices climbed within a dollar of $50 a barrel this morning as a blizzard enveloped the US northeast and boosted demand for heating oil.
Uncertainty ahead of Iraq's elections and OPEC's minsterial meeting - both on Sunday - bolstered prices, encouraging speculative hedge funds to rebuild long positions gradually.
US light crude rose 64 cents to $49.17 a barrel, building on Friday's $1.22 rally. London Brent crude rose 71 cents to $46.44 a barrel, its highest level since November 30th.
Prices have climbed as blizzards blanketed large parts of the US northeast, the biggest regional heating oil market in the world, pulling temperatures well below the seasonal average and forcing homeowners to fire up their furnaces.
The weather is expected to return to near-normal by Tuesday.
Traders worry that the freeze may drain heating fuel stockpiles that remain below year-ago levels, despite an unusually warm first half of the winter in the northern hemisphere.
Any additional disruption to Iraqi exports would add to pressure on global supply, which is still grappling with outages of nearly 500,000 barrels per day from Nigeria, Norway's North Sea, the US Gulf of Mexico and Canada.
OPEC said on Friday world stocks were rising this winter, typically a period when inventories decline, but the build was limited by stronger-than-expected demand growth.