Oil rises on cold weather

Clayton Meyer, 10, takes advantage of the heavy snow to ride his sled in Newark, Ohio, March 9, 2008. Nearly two feet of snow plagued parts of the Ohio and Tennessee valleys Saturday, shutting down travel and community events. (REUTERS/Matt Sullivan)

SYDNEY (Reuters) - Oil rose on Monday, bolstered by a bout of cold weather in the United States, but prices stayed below the record high of above $106 struck in the previous session.

U.S. light crude for April delivery which rose as much as 45 cents, was up 26 cents at $105.41 a barrel by 2332 GMT.

"The cold snap in the United States over the weekend and the closure of one of the Mexican ports were supportive of oil prices," said David Moore, a resource analyst at the Commonwealth Bank of Australia.

A late-season winter storm slammed into the Ohio Valley on Saturday, with freezing rain, ice and sleet forcing flight delays and cancellations at airports and forecasters predicting the storm to head towards the U.S. Northeast.

Snow totals from Ohio to western New York could exceed 15 to 20 inches by Sunday, the national Weather Service said.

A three-day closure of one of Mexico's three main crude oil ports, Dos Bocas, also underpinned oil's gains. Although Dos Bocas port has reopened on Monday analysts said expectations of more wild weather in the Gulf of Mexico in the coming days were lending support to prices.

Mexico, the world's No. 9 exporter of crude oil and a top three supplier to the United States, has seen its crude exports repeatedly disrupted in recent months by bad weather and storms in the Gulf, often resulting in its crude shipments being halted for days at a time.

Oil's surge to a lifetime high of $106.54 a barrel on Friday was helped by a combination of a record low U.S. dollar, a sharp drop in U.S. crude stocks and OPEC's decision not to increase output.

But a rebound in the dollar in late trading on Friday helped to ease oil off earlier highs.

Easing tensions between OPEC member Venezuela, a top oil exporter to the United States, and neighbor Colombia, also kept oil price gains in check.

The presidents of Colombia, Ecuador and Venezuela ended a border dispute on Friday, after a week of regional diplomacy in the face of hostile rhetoric and troop build-ups.

Still, some analysts say expectations of more dollar weakness, continued tensions in Nigeria and the Middle East as well as increased speculative funds pouring into commodities could keep pushing oil prices to new highs.

NYMEX crude has set an intraday record 12 times since January 2, when prices first hit $100. Settlements above $100 have been reached in nine of the last 14 sessions, the latest being Friday's $105.15.

Crude speculators on the New York Mercantile Exchange hiked net long positions last week, according to data from the Commodity Futures Trading Commission released Friday.

Net crude long positions rose to 99,539 in the week to March 4, up from 91,625 in the week March 4.

(Editing by Tomasz Janowski)

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