LONDON (CBS.MW) -- Crude-oil futures topped $49 a barrel on Tuesday, building on gains of almost 7 percent last week on forecasts for cold weather in the U.S. and amid ongoing output issues in key producing countries.
The active benchmark contract for NYMEX crude was last up 65 cents in London trading at $49.03 a barrel. The contract`s rise kept European and British stock in check.
Oil markets ``are poised to work higher ahead of the Iraqi elections and the OPEC meeting on Jan. 30,`` analysts at Man Financial Energy Group said. The Organization of Petroleum Exporting Countries will meet in Vienna, the same day as Iraq`s elections.
U.S. markets were closed Monday for the holiday. On Friday, crude for February delivery closed at $48.38 a barrel on the New York Mercantile Exchange -- its highest closing level since Nov. 30. It was up 34 cents for the session, and up $2.95, or 6.5 percent from last Friday`s close of $45.43.
February heating oil rose 0.98 cent Friday to close at $1.3509 a gallon, a 6.1 percent rise for the week; February unleaded gasoline closed at $1.2761 a gallon, up 2.15 cents for the day, and up 5.1 percent for the week.
Tough call
Price gains last week were also supported by violence in Nigeria, which has forced the closure of some facilities since December. On Friday, however, Shell (RD: news, chart, profile)(UK:SHEL: news, chart, profile) said it reopened all of the oil pumping stations it closed last month, according to Agence-France Press.
Meanwhile, in Norway, stormy weather earlier this week disrupted production at a Shell facility that produces about 140,000 barrels per day.
And violence in Iraq continues to be a factor. ``Iraqi insurgents continue to use murder and violence to try and stifle the resolve of the Iraqi people to participate in free elections,`` said Phil Flynn, a senior analyst at Alaron Trading.
But oil prices are near the ``ever elusive $50 trigger and it will take a lot of momentum to break through again as buy stops are likely ... close to that number,`` said Kevin Kerr, president of Kerr Trading International, on Friday.
OPEC`s resolve to cut production may ``snap`` if prices go above that $50 level, Flynn said. During the long weekend, the market will ``wait and listen closely for any comment coming out of OPEC,`` he said.
James Williams, an energy economist at WTRG Economics added that the market will indeed ``move on every hint that OPEC may reduce production following the Jan. 30 meeting.``
Kerr said, ``Traders will start to turn their attention to next week`s supply data and ... the OPEC meeting and elections in Iraq.``
Data released Wednesday revealed a mixed picture on U.S. petroleum inventories for the week ended Jan. 7, when the Energy Department reported a decline in crude supplies, but the American Petroleum Institute revealed an increase in stocks. See full story.
The next updates on U.S. petroleum supplies from the Energy Department and American Petroleum Institute will be delayed several hours to 5 p.m. Eastern Wednesday because of Monday`s holiday. Typically, the data would be delayed until the following day, however, Thursday is the presidential inauguration.
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