Oil prices took flight today as the northeast United States braced for a late winter snowstorm and dealers prepared for the likelihood of another OPEC output cut.
London Brent blend climbed 81 cents to $26.81 a barrel and US light crude rose 88 cents to $28.73 a barrel.
Heavy snow was forecast to start falling late today in the US Northeast, a region heavily dependent on oil for heating.
Forecasters predicted one to two feet (30 to 60 cm) of snow in some areas of the US Northeast before midday tomorrow.
Dealers also were planning for the prospect of another supply cut by the Organisation of the Petroleum Exporting Countries. The leaders of OPEC member countries Iran and Qatar said today they favoured steps to boost oil prices ahead of an OPEC meeting on March 16th.
OPEC agreed in January to cut output by 1.5 million barrels per dasy but the cartel is considering easing output again because it fears demand will slow during the second quarter. The group wants to keep prices for a basket of its crudes near $25 a barrel.
After some contradictory statements in recent weeks from some OPEC member states, commentators still think a cut is in the works.