Oil edged higher on Friday, holding above $54 a barrel on expectations cold weather in top consumer the United States would trigger a long-awaited rise in heating oil demand, Reuters reports.
U.S. crude was up 45 cents at $54.68 a barrel by 1208 GMT, after a $1.14 slide on Thursday.
London Brent crude was up 33 cents at $54.45.
"Yesterday's drop was not a big one. $50 is overdone (to the downside) and we could go back to $60 next week with the winter coming," Keith Sano of Tokyo-based Sumitomo Corp said.
Unseasonably mild weather and a shift in fund flows have pushed oil down about 10 percent since the start of 2007, blunting the impact of OPEC supply cuts agreed last year.
Temperatures in the U.S. northeast, the world's biggest heating oil market, were expected to stay below normal for at least the next week, the AccuWeather Web site showed.
But the late cold snap could have come too late to have a major impact on inventories and demand, analysts said. After the market's failure last week to break significantly below $50 a barrel, analysts said the technical picture was short-term bullish, although the rally from the low of $49.90 for U.S. crude was stalling.
The Organization of the Petroleum Exporting Countries has said it would wait to assess the impact of existing cuts of 1.7 million barrels per day (bpd) before calling for further reductions.
The 12-member producer group has all but ruled out an emergency meeting and further production cuts before it next gathers on March 15 in Vienna.
(Reuters, 26/01/2007)