Colder temperatures pushed oil higher today after prices sank to a four-month low last week when bulging US fuel stockpiles eased fears of a winter fuel crunch.
Oil cartel Opec said it would keep watch on the weather before mapping production policy and that lower prices were not yet prompting talk of supply cuts.
US light crude oil was trading up 53 cents at $58.06 a barrel and London Brent was up 56 cents at $55.55 a barrel at 1pm.
"It appears increasingly likely that we will need colder-than-normal temperatures - in order for heating oil and gas oil to perform this winter and lead crude up," said Mike Wittner of Calyon.
"With each passing week of warm weather, the upside diminishes, the downside increases, and the chances of an oil market correction before the springtime also increase."
Balmy weather has helped push the price for Opec's reference basket of export crudes close to $50 a barrel, a level some members wish to defend. But Opec's chief said it was too early to talk of cutting back supply from the cartel, despite weaker prices.
The United States wants Opec to keep pumping at its highest rate in 25 years to ensure the market remains well supplied.
Opec which next meets on December 12th in Kuwait to discuss output policy, has said there are no takers for an extra two million barrels per day (bpd) of crude it has volunteered if needed.
Top exporter Saudi Arabia will provide Asian and European customers with
steady volumes of crude for December versus November. Opec's high rate of production has helped fill stockpiles in the United States, the world's biggest consumer.
US crude stocks rose 4.5 million barrels to 323.6 million barrels amid strong imports last week, government data showed, taking inventories to nearly 13 per cent above last year and comfortably exceeding the average range for this time of year.