Oil prices barely higher amid cold weather in U.S., anticipation of OPEC cuts

Friday, February 2nd 2007, 10:57 am

By: News On 6

NEW YORK (AP) _ Oil prices inched up Friday amid a cold streak in the United States, a major consumer of heating oil. Meanwhile, traders watched for signs that OPEC members were cutting output.

Concerns also were stoked by a threat from the two main Nigerian oil workers' unions to strike next week in protest of rising violence in the country's petroleum-producing southern region.

Light, sweet crude for March delivery rose 3 cents to $57.33 a barrel in late morning trading on the New York Mercantile Exchange.

``The cold weather in the U.S. seems like it will last for a while, and prices have moved up the range,'' said Ken Hasegawa of Tokyo brokerage Himawari CX.

On Thursday, the contract ended at $57.30 a barrel after rising as high as $58.86, the highest level for a front-month contract since Jan. 3.

Brent crude for March delivery gained 11 cents to $56.83 a barrel Friday on the ICE Futures exchange in London.

Oil prices have climbed nearly 14 percent since touching a 20-month low of $49.90 a barrel Jan. 18. The advance has been triggered by the arrival of cold weather in the U.S. Northeast, the nation's main heating oil consuming region.

A winter storm rushed across the U.S. Southeast on Thursday, grounding flights a day after coating roads with deadly ice in the Midwest. Analysts expect continued colder-than-normal temperatures to boost natural gas and crude oil prices.

``The colder winter weather should have a bigger impact in the coming weeks,'' said Antoine Halff, head of Fimat energy research. ``There's always a lag in these things.''

Heating oil futures rose 1.5 cent to $1.6435 a gallon, while natural gas prices slipped 7 cents to $7.460 per 1,000 cubic feet. Gasoline futures rose less than one penny to $1.5260.

Expectations that the Organization of Petroleum Exporting Countries will tighten their spigots further are also likely to shore up prices.

The Wall Street Journal reported this week that Saudi Arabia has advised its customers of its impending 158,000 barrel a day output cut effective Feb. 1. The reduction is part of a December agreement by OPEC to cut output by 500,000 barrels a day on top of an earlier production cut of 1.2 million barrels a day.

Another factor in the market was the threat of a strike next week by oil workers in Nigeria. Dozens of workers, foreign and Nigerian, have been seized in attacks in the Niger Delta region in recent weeks and the unions said Thursday they would protest with a work stoppage beginning Monday.

The 20,000 blue and white-collar union members ``are of the opinion that the environment is not safe enough for them to continue operation,'' said Peter Akpatason, one of the union's leaders on behalf of both unions.