NEW YORK – Oil rose on Thursday on forecasts that cold weather would continue in the United States, stoking up heating demand in the world's biggest energy consumer.
U.S. crude gained 15 cents to $58.29 a barrel by 1826 GMT, after settling up $1.17 on Wednesday. London Brent rose 34 cents $57.74 a barrel.
Oil prices have rebounded from a 20-month low of $49.90 on Jan. 18 as cold weather — albeit late in the northern winter season — helped to draw down U.S. distillate fuel stocks for the first time in nearly two months last week.
The National Weather Service has forecast below normal temperatures in the next two weeks, increasing demand for heating fuels.
"The trend remains higher, supported by forecasts for colder weather ahead," said Aaron Kildow, a broker at Prudential Financial in New York.
U.S. weekly natural gas stocks also fell 186 billion cubic feet last week, the Energy Information Administration said on Thursday.
Further support for prices has come from a rush of investment by big money funds who were sidelined earlier this year.
"We are getting some (investment) funds coming back now as there is enough strength in the market," said Gerard Burg, an analyst at National Australia Bank.
The market is also eyeing OPEC's production cut which took effect on Thursday to see the effects of the agreement to trim supplies by 500,000 barrels per day (bpd).
The reduction is in addition to a 1.2 million bpd cut from November agreed by the group, which pumps over a third of the world's oil. The combined deals should reduce OPEC supplies by around 6 percent.
Output problems from Nigeria could bolster markets throughout this year as Royal Dutch Shell said it expected militant attacks that have shut a fifth of the OPEC nation's output to continue.
"This year, we still expect to have substantial volumes shut in," Shell's oil and gas chief Malcolm Brinded told reporters.