Oil prices rose by more than $2 a barrel on Friday in a shortened trading session ahead of the three-day holiday weekend in the U.S.

Traders shrugged off a rise in OPEC's official production ceiling — a move they called symbolic — and they played down the significance of a decision Thursday by the oil cartel to suspend talks on an additional ceiling hike. The president of the Organization of Petroleum Exporting Countries (search) said Thursday that the group would raise its output target if prices rose to $60 a barrel.

After Friday's rally, that level is not too far away.

August futures contracts for light sweet crude on the New York Mercantile Exchange (search) surged $2.25 to settle at $58.75 a barrel.

Analysts said prices moved up as traders took long positions — buying oil ahead of the July 4 holiday Monday. That was considered a normal development given the recent volatility in the market.

August gasoline futures soared 8.27 cents to $1.6485 a gallon, while heating oil futures climbed 7.5 cents to $1.7111 a gallon.

August Brent crude futures rose $2.04 to $57.62 a barrel on London's International Petroleum Exchange.

The June 15 OPEC decision to raise its official production quota by 500,000 barrels to 28 million barrels came into effect on Friday. But the group, including Iraq, which is not bound by the quota system, already is pumping close to 30 million barrels a day — or about 35 percent of global demand.

OPEC on Thursday decided to suspend talks on another hike following the recent tumble in prices, but analysts said that development had little impact on the market.

"The market was fairly cynical about that proposal," said Deborah White of SG Securities in Paris. She said that with overproduction a fact, "most of the market participants didn't think it would translate into a production increase."

While oil prices closed above $60 a barrel on Monday, they fell for three straight days and ended Thursday below $57 a barrel.

Analysts attributed the cooling down of oil prices to profit-taking by hedge funds and a dampening of last week's bullish market sentiment by U.S. government data showing increased supplies of crude and other fuels.

Prices are expected to continue falling at least in the short term, analysts said.

"The inventory data from the United States dampened what was a fairly bullish market last week, and we haven't seen the last of this," said ANZ Bank energy analyst Daniel Hynes in Melbourne, Australia.

The Energy Department's (search) statistical arm said Wednesday inventories of crude oil increased by 1.1 million barrels to 328.5 million barrels, 8 percent above year-ago levels.

Refinery utilization also increased to 96.3 percent of capacity, up from 94.8 percent the week before, and that appeared to give a lift to the fuel supply. Gasoline inventories grew by 300,000 barrels to 216.2 million barrels, or 4 percent above year-ago levels, the government said.

"The report that U.S. refiners had increased utilization and output at a time when demand is strongest took people by surprise," Hynes said. "It hasn't changed people's minds that refinery capacity is tight, but it has dampened sentiment."

Crude oil futures are more than 51 percent above year-ago levels, but would still have to top $90 a barrel to reach the inflation-adjusted high set in 1980.