Oil climbed towards $49 a barrel today, drawing support from cold weather and an escalation in the Ukraine-Russia dispute that has choked off natural gas supplies and increased demand for oil products.
Russian gas supplies to Europe through Ukraine shut down completely on today, leaving growing numbers of European Union member states without Russian fuel in freezing mid-winter temperatures.
"It appears prices are still being supported by colder weather and to some extent the Ukrainian crisis," said Christopher Bellew, a broker at Bache Commodities in London.
US crude for February delivery was up 27 cents at $48.85 by 12.44pm, while London Brent rose 65 cents to $51.18.
The Russia-Ukraine dispute has increased demand for gas oil, offering support to crude. It echoes a similar row three years ago that raised questions about Russia's reliability as an energy exporter.
Later today, the focus for oil traders will shift to weekly US inventory data that will give the latest indication of demand in the world's biggest fuel consumer.
Crude oil stocks are expected to rise 900,000 barrels and supplies of distillates and gasoline are also expected to have increased.
Oil has risen nearly 50 per cent from a low of $32.40 on December 19th as Israel's incursion into Gaza and the Russia-Ukraine row raised concern about supply disruptions, and OPEC output cuts threatened to tighten supplies.
Israel and Hamas studied an Egyptian proposal for a ceasefire in the Gaza Strip on Wednesday that won backing from the United States and Europe.
While the conflict does not directly threaten any oil supplies, unrest in the Middle East can bolster prices because countries in the region pump about a third of the world's oil.
Reuters