Oil prices steadied over $99 a barrel on Tuesday as a blast of cold weather swept parts of Europe and the United States, driving demand for heating fuels, while caution prevailed ahead of a March 5 Opec meeting.
US crude rose 3 cents to $99.26 a barrel. London Brent crude rose 26 cents to $98.05.
The cold weather sparked a rally in the major world heating fuel markets, boosting crude oil benchmarks.
London gasoil futures struck a record high on Monday while US natural gas briefly touched a two-year high and heating oil gained close to 1 per cent.
"The firm oil price reflected the effects of forecasts of cold weather in the US Northeast, caution ahead of the March 5 Opec meeting and geo-political tensions in the Middle East," David Moore, a commodities strategist at the Commonwealth Bank of Australia, said in a research note.
Oil prices hit a record peak over $101 a barrel last week, buoyed by speculative funds who continue to have a healthy appetite for commodities.
Also supportive for prices are a Turkish military incursion into oil-producing northern Iraq, worsening strains between Iran and the West over Tehran's nuclear ambitions, and Venezuela's dispute with Exxon Mobil Corp over compensation for a nationalised oil project.
The market was eyeing policy direction from Opec members ahead of the group's next meeting on March 5.
On Monday a senior Iranian oil official said there was enough crude in the market and saw no reason for Opec to raise output, an Oil Ministry website said.
The remark came a day after Iran's oil minister, Gholamhossein Nozari, said he would support an Opec output cut.
An industry consultant said on Monday the group's oil supply is set to fall by 200,000 barrels per day in February due to lower output from its top two producers, Saudi Arabia and Iran. (Reuters)
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