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Last Updated: Tuesday, 6 February 2007, 22:28 GMT
Oil nears $60 on cold US weather
Two men shovelling snow in Colorado
The cold weather is expected to last for some time
Freezing temperatures across much of the US have forced oil prices back up close to $60 a barrel, as demand for heating oil has grown.

Temperatures in the Northeast and Midwest are forecast to remain below average for the next 10 days, keeping oil demand at above-normal levels.

This, in turn, is expected to result in a sharp fall in heating oil supplies.

US light, sweet crude closed up 14 cents at $58.88 a barrel on Tuesday with Brent crude up 32 cents at $58.42.

Prices had risen as high as $59.99 earlier in the day before falling back.

'More bullish'

Oil prices fell as low as $49.90 last month following unseasonably mild temperatures along the Northern seaboard.

But the prospect of a concerted cold spell has pushed prices back up.

The plunging temperatures are thought to have increased demand for distillate stocks by up to 500,000 barrels a day.

According to one industry expert, official figures to be published on Wednesday could reveal that distillate inventories dropped by more than three million barrels over the past week.

"The cold weather has helped the oil market find a floor and that has brought the investors back in," said Victor Shum, an energy analyst with Purvin and Gertz.

"The overall market sentiment is much more bullish now."

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