Oil prices held firm today, underpinned by worries about tightening heating oil supplies in the West.
Brent crude in London was down just 13 cents at $30.56 a barrel, holding within a dollar of post-Iraq war peaks touched on Friday. New York crude futures were down 14 cents at $31.68.
Prices have rallied $5 or 20 per cent since OPEC surprised oil markets last month by cutting production by 3.5 per cent ahead of the northern winter, spurring a wave of buying by speculative hedge funds.
OPEC decided to cut output from November 1st because it believes international supplies will swell as Iraqi production recovers and Russian output rises.
Iraq is ramping up production following the US-led invasion in March, although progress is being hampered by looting and sabotage.
But oil dealers said the potential downside for prices would be limited by worries about falling heating oil stocks in the key consuming regions of the United States and Europe.
US heating oil inventories and European stocks of heating and diesel fuel are below year-earlier levels, according to government agency reports last week.
Analysts estimated US distillate stocks, including heating oil, fell one million barrels to 130.5 million following a cold snap that hit the US northeast, the biggest regional consumer of heating fuel in the world.
The data are expected to show crude stocks rose 1.7 million barrels to about 288 million barrels.