Oil steadied above US$61 today as consumers burned more fuel to stave off the cold in the United States.
Forecasts for strong oil demand growth over the next five years underpinned prices as the market waited for weekly US oil inventory data due later today.
US crude CLc1> fell a cent to $61.36 a barrel, while London Brent crude LCOc1> was up 4 cents at $59.56.
Analysts forecast US crude stocks to have fallen due to rising heating needs in the US Northeast, the world's largest heating oil market. Crude stocks were expected to fall 900,000 barrels as refiners cranked up output to meet peak winter demand.
Cold weather last week boosted heating demand to about 30 per cent above normal, the US National Weather Service said, and colder temperatures this week could keep demand unusually high.
Heating oil stocks have remained relatively robust this year after a mild start to winter.
Oil touched $61.90 yesterday, its highest since November 4th, and the US cold snap helped natural gas prices soar to a record high. Kerosene stockpiles in the world's third-largest oil consumer Japan, where the fuel is used in home heating, fell last week after a cold snap boosted demand, putting them 7 per cent below last year's hefty levels, data showed.
Oil prices were also supported by yesterday's report of the International Energy Agency (IEA), which forecast strong growth in world oil demand over the next five years despite high prices.
The IEA, adviser to 26 industrialised nations, said oil demand growth would average 1.8 million to 2.0 million barrels per day (bpd) for each of the next five years. Strong growth in countries such as China and India would keep demand rising, the IEA said.