Oil prices rebounded Friday but remained below $50 a barrel after declining 4 percent over the past week due to rising U.S. supplies of crude and natural gas.

Strong demand during the Northern Hemisphere winter could push prices higher in the weeks ahead, analysts said, though it depends on how fast depleted heating oil inventories grow and how severe the winter is in the Northeast and Midwest, the major consuming regions for this fuel.

Violence in the Middle East and labor tensions in Nigeria are other factors that could affect oil prices in the near term.

Crude for December delivery rose 79 cents to settle at $49.61 a barrel on the New York Mercantile Exchange (search).

Oil prices fell $2.06 Thursday, closing below $49 for the first time since Sept. 24, after the Energy Department (search) reported that the amount of natural gas in storage grew more than expected last week. This followed a report showing that the nation's oil supply also grew.

Natural gas futures fell Friday by 24.5 cents to $7.954 per 1,000 cubic feet — a decline of 9 percent in the past week.

Despite the broader trend lower this week, oil prices moved higher Friday because traders were fearful of being "short," or betting that prices will fall, ahead of the weekend, when a terror attack or some other unexpected supply disruption could occur.

Marshall Steeves, an energy analyst at New York-based brokerage Refco, said he would be "a bit cautious" about declaring that an oil market peak was reached late last month. "But I would say things have cooled off for the time being," he said.

Steeves said geopolitical strife and colder-than-expected temperatures could jump-start another price rally, while the absence of these events — and growing fuel supplies — would likely result in lower prices. He expects the price of oil to trade "$4 or $5 on either side of $50 a barrel" for the remainder of the year.

The recent downtrend in oil prices follows an Energy Department report last week that showed U.S. supplies of crude growing. The agency reported another sharp increase in commercially available crude inventories this week, helping prices fall by more than $6 since hitting a record $55.17 a barrel on Oct. 22 and Oct. 26.

The nation's oil supply is now just 1 percent below year ago levels at 289.7 million barrels.

"Crude inventories have been building in the United States and that is a result of production (returning) that was temporarily stopped due to Hurricane Ivan," said Victor Shum, an oil analyst in Singapore for Texas-based Purvin & Gertz. Nearly 28 million barrels of crude output have been lost since the hurricane swept through the region, but daily output has gradually increased.

Analysts said imports of light crude were also on the rise due to the high price sellers can get in the United States.

This extra crude is expected to be put to use by refiners, who are completing pre-winter maintenance in time to take advantage of high prices for their products, particularly heating oil.

The nation's supply of distillate fuel, which includes heating oil, diesel and jet fuel, is roughly 12 percent below year ago levels and an area of concern ahead of winter.

"It will be interesting to see if we can develop enough" heating oil, said J. Marshall Adkins, managing director of energy research at Raymond James in Houston. "We may end up with a bottleneck in the refining area."

Heating oil futures inched 0.2 cent higher to $1.3741 per gallon on Friday and gasoline futures finished the day at $1.2869 per gallon, a decline of 0.94 cent. In London, Brent crude futures rose 41 cents to $46.42 on the International Petroleum Exchange (search).

In Iraq on Friday, saboteurs set off an explosion that damaged a gas pipeline. A North Oil Co. official said the pipeline was expected to be repaired within three days.

Other factors keeping traders on edge include a general strike planned for Nov. 16 in Nigeria to protest rising domestic fuel prices and continuing legal woes for Russian oil giant OAO Yukos.

Geopolitical instability has played an outsized role in oil markets this year due to the fact that supplies are tighter than usual amid strong demand.

Global demand in the fourth quarter is projected to be 84 million barrels a day, while the amount of excess production capacity is only about 1 million barrels a day.

Analysts anticipate that today's high prices will choke off some demand and spur more drilling activity in 2005.