LONDON - World oil prices rose Wednesday amid an increase in US crude inventories, a drop in heating fuel reserves and the ongoing cold snap in parts of the United States and Europe, dealers said.
New York's main contract, light sweet crude for delivery in April, rose 37 cents to 52.05 dollars a barrel in early dealing.
It had earlier peaked at 52.50 dollars, its highest level for four months.
In London on Tuesday, the price of Brent North Sea crude oil for delivery in April gained 29 cents to 50.40 dollars a barrel.
Figures from the US Department of Energy (DoE) showed a rise in commercial crude inventories and a fall in distillates inventories but were broadly in line with analysts' forecasts.
"We did not see builds in stocks that were large enough to change the bullish trend. The stats were neutral," Societe Generale analyst Deborah White said.
"But to be bearish in a bullish market, you would have to see something really dramatic -- like distillate stocks going sideways -- and that has not happened."
In its latest weekly snapshot of US crude stocks data, the DoE announced a rise in crude stocks of 2.4 million barrels to 299.4 million barrels for the week ending February 25.
That beat market expectations of a rise of one million barrels.
Gasoline reserves increased by one million barrels to 224.5 million barrels, in line with expectations, but distillates inventories fell strongly by 1.8 million barrels to 110 million barrels. Analysts expected a drop of 1.4 million.
Heating oil stocks, included in the total distillates figure, were down 900,000 barrels to 40.2 million barrels and have now fallen for the past six consecutive weeks, analysts said.
"The fall in distillate supplies were no surprise, as it is still very cold in the US," said Investec analyst Bruce Evers.
Industry data provided by the American Petroleum Institute (API) confirmed that distillate supplies had fallen by 1.4 million barrels.
The API also reported crude supplies had risen, but reported a fall in gasoline stockpiles of 3.9 million barrels.
Oil prices were to remain supported this week by freezing temperatures in the northern hemisphere, with fuel stocks likely to drop further, analysts said.
Domestic heating oil requirements in the United States would be 14 percent higher than usual this week due to severe winter weather, according to the US National Weather Service.
However, a change in weather conditions during March could point towards a correction in oil prices.
"If we don't stay cold throughout the month, the first... signs of warming could bring a sizeable correction," said Phil Flynn, an analyst at Alaron trading house in Chicago.
Separately, traders said they expected that the Organization of Petroleum Exporting Countries (OPEC) would maintain its current production level of 27 million barrels a day when meeting later this month in Isfahan, Iran.
03/02/2005 18:23 GMT