World crude oil prices soared Friday as traders turned cautious amid cold temperatures in the US while bracing for the upcoming OPEC meeting and landmark Iraqi elections.
New York's main contract, light sweet crude for delivery in March jumped US$1.22 to US$48.53 a barrel in closing trade.
In London, the price of Brent North Sea crude oil for delivery in March gained 1.41 dollars to close at US$45.73.
"The market is concerned about an OPEC production cut and worried about the elections in Iraq" that could see an increase in violence, said Phil Flynn at Alaron Trading.
Temperatures hit a low of minus 11?C in New York on Thursday, prompting renewed concerns about supplies of heating oil in the northeast.
"The cold weather just knocked in," said Jamal Qureshi, analyst at PFC Energy, who added that the market remained tense over concerns about demand from China and OPEC's upcoming meeting.
There are fears that violence could spoil polling day on Jan. 30, risking disruption to oil supplies out of Iraq.
On Friday, insurgents sabotaged an oil pipeline in northern Iraq, interrupting the flow of crude to a major refinery, Iraqi police said.
The Organization of Petroleum Exporting Countries was meanwhile set to meet on the same day as the Iraqi elections -- and the likelihood of a production cut has caused mounting market tension.
OPEC on Friday said that global oil demand growth would be stronger than expected in 2005 and said its output would be "more than sufficient" to meet consumer needs.
OPEC said it was raising its forecast for global oil demand growth this year to 83.64 million barrels per day, marking an increase of two percent on 2004.
The 11-member cartel agreed in Cairo last month to reduce production by one million barrels a day from the start of 2005 to bring the group closer to its official output ceiling of 27 million barrels.
Expectations of an output cut have increased in recent days after the United States announced further builds in its crude stockpiles.
"If they do intend to cut production prices are definitely going to go above US$50," said Qureshi.
"As US stocks build there are concerns that OPEC may seek to make an additional cut in crude supply, after agreeing to trim over-quota leakage by a million barrels per day from Jan. 1," analysts at the Sucden brokerage firm said.
US crude oil reserves rose by 3.4 million barrels to 292.2 million in the week that ended Jan. 14, a Department of Energy report said and are now 8 percent above the level during the same period a year ago.
The report showed however a dip of heating oil reserves of 500,000 barrels to 49.1 million -- a worry due to a cold snap in the US' northeast region, which consumes 80 percent of the country's heating fuel.