LONDON, Jan 18 (AFP) - World oil prices surged to six-week high points on Tuesday, approaching the symbolic 50 dollars a barrel in New York amid freezing temperatures in the United States and as the International Energy Agency (IEA) forecast strong global demand for crude in 2005.
New York's main oil contract, light sweet crude for delivery in February, rose as high as 49.50 dollars a barrel in early deals, the highest level since November 30.
The contract stood at 48.60 dollars at about 1700 GMT, up 22 cents on Friday's closing. New York markets were shut Monday for a public holiday.
The price of Brent North Sea crude oil for March jumped to as high as 46.35 dollars in late deals Tuesday, the highest level also for one-and-a-half months.
The contract stood at 45.65 dollars at about 1700 GMT, up 62 cents from Monday's closing price.
"Most of the strength is due to the cold weather in the States. That's the main factor," Investec analyst Bruce Evers said.
"The weather is supposed to get very, very cold later in the week. That's obviously driving heating oil (prices higher) which is pulling the crude oil price up."
Evers added prices were also supported by data from the IEA, which said global demand for oil would remain strong in 2005, led by China and Asian countries, and warned that unexpected events could crimp supply.
The agency estimated also that OPEC producers had so far cut production by about half of the one million barrels per day agreed from January to sustain prices from March.
The IEA said it had raised its forecast for demand growth in 2005 slightly to 1.44 million barrels per day, up by 1.7 percent in 2004.
Demand growth had surged by 3.3 percent in 2004 from 2003, at more than twice the expected rate and the fastest growth since 1976.
"I think part of the strength (in prices Tuesday) comes from the IEA data that came out this morning and showed a small increase in demand projections for this year," Evers said.
Elsewhere, the possibility of an output reduction after the 11-member Organisation of Petroleum Exporting Countries (OPEC) cartel meets on January 30 has generated additional market concern, analysts said.
The 11-member OPEC cartel agreed in Cairo last month to reduce production by one million barrels a day from the start of 2005 to bring the group closer to its official output ceiling of 27 million barrels.
OPEC ministers said then they were ready to reduce output again if needed to mop up excess supply in anticipation of a seasonal downturn in demand as the northern hemisphere winter ends.
01/18/2005 17:32 GMT - AFP