Oil prices held near $51 a barrel today amid a weak US dollar and the late cold spell gripping the northern hemisphere.
The United States has expressed its dismay over rising costs, but OPEC producer Saudi Arabia appeared increasingly at ease with higher prices.
Saudi Oil Minister Ali al-Naimi has predicted that oil prices would stay between $40 and $50 for the rest of this year - a signal the OPEC cartel might not be committed to cooling the market.
In the past, members of OPEC, which controls about 40 per cent of global exports, had said they viewed $50 as too high. The United States' Treasury Secretary, Mr John Snow, has said that he is unhappy with the current oil prices, saying it was remarkable that the US economy had remained strong despite the increasing energy costs.
Continued global growth has backed up the view that consuming nations can weather higher costs, but officials are growing anxious as prices close in on last year's record $55.67 peak.
Despite fears OPEC may now harbour a higher price target, the cartel has backed away from plans to cut supply for the second quarter, when consumption eases following the northern winter. Venezuela and Indonesia both came out in favour of leaving output limits steady when the group meets in Iran on March 16th.
Kuwaiti Oil Minister and OPEC President Sheikh Ahmad al-Fahd al-Sabah said this week the producers could look to cool prices. But the group is already pumping at near to capacity, leaving little global cushion to meet supply problems, even with US inventories at seemingly healthy levels.
US petrol inventories leapt 1.8 million barrels last week, three times the anticipated build, while a 600,000-barrel rise in crude stocks was in line with expectations and kept supplies in a healthy 7 per cent surplus versus last year.
Heating oil inventories also rose 300,000 barrels to narrow the deficit versus a year ago to 7.4 per cent, knocking US heating oil futures off a new four-month high of $1.52.
Heating oil was down 44 points at $1.4606 a gallon on Friday, with the market still supported by forecasts of a cold snap expected in the northeast of the United States, increasing heating oil demand.