NEW YORK – Oil prices held near $59 a barrel Monday as a blast of arctic weather propped up heating demand in top consumer the United States and countered easing threats of an oil strike in Nigeria.
U.S. crude oil settled 28 cents lower at $58.74 a barrel, after hitting a one-month peak of $59.95 earlier. London Brent crude fell 31 cents to $58.10 a barrel.
A warm start to the U.S. winter took 19 percent off U.S. crude prices at the start of January, before cold temperatures finally hit the giant heating oil market in the U.S. Northeast.
"The ongoing cold weather in the U.S. is still the biggest upside factor at the moment. We're finally seeing a more normal climate in the Northeast, so that will increase consumption in heating oil," said Andrew Harrington, an analyst at ANZ Bank.
Prices surged $3.60, or 6.5 percent, last week, rising $1.72 Friday alone. U.S. crude rallied early Monday but failed to pierce key resistance points, traders said.
"Inability to get through resistance at $60, after approaching it several times, took some of the momentum out of the market," said Mike Fitzpatrick, vice president for energy risk management at Fimat USA.
U.S. heating demand was expected to be about 20 percent above normal in this week, the U.S. National Weather Service said Monday, as temperatures dipped to their lowest level this winter.
Forecasters said temperatures in the northeastern United States were expected to average below to well below normal for the next six to 10 days.
The crude market was pulled lower after oil unions in Nigeria, the world's eighth-largest oil exporter, suspended plans Sunday for an indefinite strike.
The unions said they would meet with President Olusegun Obasanjo Monday to discuss the lack of security in the Niger Delta that has shut down a fifth of the country's oil output.
Although the immediate strike threat had ebbed, analysts said the market would remain on edge over the possibility of further violence before elections in April.
In Iran, the country's top nuclear official said Sunday the country would not suspend its uranium enrichment work, as demanded by a U.N. sanctions resolution.
Tehran's latest defiant statements revived worries that the world's fourth-largest oil producer would cut oil output in retaliation if the United States, which fears it is trying to build atom bombs, pushed for further sanctions.
Iran says it is seeking only civilian nuclear energy.
Oil prices have rebounded from a slide below $50 a barrel in mid-January, aided in part by a second output cut, of 500,000 barrels per day, by the Organization of the Petroleum Exporting Countries, which took effect on Feb. 1.
Nigerian Oil Minister Edmund Daukoru said Monday he was pleased with the recent rise in oil prices and that OPEC would likely keep output unchanged at its next meeting in March.