Oil edged up towards $82 a barrel today, rising for the ninth straight session, as cold snaps in key consumers the United States and Europe boosted demand for heating fuel.
U.S. crude for February delivery was up 14 cents to $81.65 a barrel by 1034 GMT, off an earlier high of $81.99, a cent below the October 2009 high, and after settling up $2.15 at $81.51 yesterday, its highest close since Oct. 9, 2008.
London Brent crude climbed 17 cents to $80.29.
"The extreme cold weather, spreading as far as China, is supportive today," said Rob Montefusco, oil trader at Sucden Financial.
Industry data from is forecast to show a 1.9 million barrel drawdown last week in distillate stocks, which include heating oil and diesel fuel, while crude stocks were seen unchanged and gasoline supplies higher.
U.S. crude futures would reach the highest point since Oct. 14 2008 if they push above $82 and some analysts said it was the anticipation that prices would rise above this psycological point that was boosting oil today.
"The price rise is not supported by fundamentals today it is investment driven," Eugen Weinberg, oil analyst at Commerzbank said on Tuesday.
"There is a lot of speculative demand given the fact that we are close to $82, which was the intra-day high last year."
COLD SNAP CONTINUES
Frigid temperatures in the U.S. were expected to boost the country's heating demand to 21 percent above normal, with consumption in the U.S. northeast -- the largest heating oil market -- seen 11 percent above average levels.
Unusually cold weather in Britain is expected to continue into the second half of January after the coldest December since 1995, while lower temperatures in Europe were seen gradually spreading from the northeast to the southwest during the next few days.
Heavy snow and biting cold also hit parts of Asia on Monday, with unusually harsh winter weather snarling transport across north China, South Korea and India.
Investors were watching for any further developments between Russia and Belarus, after an oil dispute saw Russia briefly cut off supplies to the eastern European nation. Russia on Monday said it had resumed supplies to refineries in Belarus, but tension still simmers.