Cold snap pushes oil through $52 barrier

Oil prices broke through a key level yesterday, reaching $52 a barrel as Saudi Arabia, the world's largest exporter, forecast they would stay above $40 for the rest of the year.

Oil prices broke through a key level yesterday, reaching $52 a barrel as Saudi Arabia, the world's largest exporter, forecast they would stay above $40 for the rest of the year.

Traders brushed aside better-than-expected US inventory data to drive prices in New York up 88 cents to $52.05. In London, Brent crude gained $1.17 to $49.68. Prices have surged about $6 in the past two weeks in response to strong demand, fears of a cut in production by the cartel Opec, and the cold weather snap across Europe and the United States.

The rise has been fuelled by the fall in the dollar that enables non-US countries and companies to raise their demand.

Opec has attempted to cool the market by hinting that it is unlikely to reduce production quotas when the 11-nation group meets in Iran next month.

Ali al-Naimi, Saudi Arabia's oil minister, said yesterday he believed crude prices were likely to stay between $40 and $50 throughout the year. "Just looking at fundamentals - inventories, supply, demand and the worldwide desire for a stable oil market - I believe it will be in this band," he told CNBC television.

US distillate inventories, which includes heating oil, fell 700,000 barrels to 111.8 million barrels last week, the Energy Information Administration said.