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Cold weather forecast for Northeast drives up oil prices

NEW YORK -- Crude oil futures rose slightly yesterday on predictions a cold snap was headed for the northeastern United States, the world's biggest winter heating fuel market.

Light, sweet crude for December delivery rose 16 cents to settle at $57.69 on the New York Mercantile Exchange, after rising as high as $58.20 earlier in the day.

Heating oil rose 0.69 cent to settle at $1.7304 a gallon, while gasoline rose 1.11 cents to settle at $1.4961 a gallon.

Forecaster AccuWeather predicted a ''big change" in the weather pattern this week, with a cold jet stream, coming from Canada, hitting the eastern US by midweek and staying through the weekend, AccuWeather said.

''Heating oil is up solidly, and that's taking the pressure off the crude market," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. But the market is waiting for the cold weather to happen before making any big moves, he added.

For most of the past week, the eastern United States has been enjoying warmer weather than normal for this time of year.

Nymex crude's Friday closing price of $57.53 was the benchmark contract's lowest close in four months. The oil market has been roiled in recent months from outages caused by hurricanes Katrina and Rita and speculation there wouldn't be enough supply to counter winter demand, when usage of heating oil rises.

Prices dipped after both the United States and Japan reported rising inventories last week, amid signs that gasoline demand was also slowing in the United States.

Hurricane Katrina sent prices soaring to $70.85 a barrel Aug. 30, but they have since fallen about 20 percent.

Prices could fall even further in the near term, said BNP Paribas analyst Dominic Bryant, but warned a weather-led spike was only weeks away.

''Once the weather turns colder in the US, there is scope for a rebound in the price," he said. ''Stocks of distillates are still below average for the time of year and production has yet to fully recover from the hurricane-related disruption."

Nymex natural gas fell 10.5 cents to settle at $11.607 per million British thermal units.

December Brent crude on London's International Petroleum Exchange slipped 22 cents to settle at $54.72 a barrel.

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