Oil futures prices rose in Europe Friday amid concerns about heating oil supplies at the beginning of the Northern Hemisphere winter.
The January contract for Brent rose 29 cents to $44.95 per barrel on the International Petroleum Exchange (search) in London, off a high of $45.51, as the New York Mercantile Exchange (search) was closed following the U.S. Thanksgiving holiday.
Analysts said that traders were reluctant to go into the weekend short after a late rally Wednesday in the oil markets following a U.S. government report showing a big drop in natural gas inventories.
"With Nymex effectively closed until Monday, there might be a few positions being squeezed," said Investec Securities analyst Bruce Evers.
"As we get nearer and nearer the winter months, it's something for the markets to be concerned about," he added.
Evers said the market also remained preoccupied with developments in Iraq, a major producer, and a tax wrangle in Russia between the government and Yukos (search), the energy company.
Yukos' chief financial officer Bruce Misamore said Thursday that he has delayed his return from London to Moscow indefinitely after Russian prosecutors summoned him Wednesday for questioning. Yukos owes the Russian government US$24.5 billion in back taxes.
"I was going to travel back yesterday but had information that there was potential that they could bring charges against me," Misamore, a U.S. citizen who is in the British capital with other Yukos managers for a company meeting earlier this week, told The Associated Press in a telephone interview. "Management hasn't abandoned the company — we are trying to find out what the situation is."
The Russian dispute has added to market worries about supplies — concerns that were not stemmed by weekly U.S. government data released Wednesday showing rising domestic inventories of crude and distillate fuel, which includes heating oil.
Light, sweet crude for January delivery rose 50 cents to settle at $49.44 per barrel on the New York Mercantile Exchange on Wednesday. The market was closed Thursday and Friday for the Thanksgiving holiday.
The reported rise in distillate fuel inventories followed nine straight weeks of declines and heating oil supplies are still far below year ago levels.
The world's surplus production capacity is about 1 percent above global daily consumption, leaving little wiggle room in the event of a production outage.
Adding to upward pressure on prices Wednesday was a 20 percent jump in natural gas futures as the front-month contract expired and the government reported a decline in inventories that are still bountiful for this time of year.