* Heavy snows strand Christmas travellers in Europe
* Core OPEC ministers sees no need for extraordinary meeting
* Oil price rally stokes inflation fears
(Adds more from OPEC ministers, adds closing price)
By Dmitry Zhdannikov and Randi Fabi
LONDON/SINGAPORE, Dec 24 (Reuters) - Oil hovered around its
highest levels in more than two years on Friday, supported by
cold weather across the globe, appetite for risk assets and
signals from OPEC it would not arrest the rally.
European benchmark ICE Brent crude for February <LCOc1>
closed 48 cents down at $93.46 on Friday after hitting $94.74 a
barrel, its highest level since October 2008.
Global benchmark U.S. crude futures <CLc1>, which hit a
26-month high of $91.63 on Thursday, did not trade on Friday
with the NYMEX floor closed for the Christmas holiday.
Brent, trading at a premium to U.S. crude, has surged partly
due to a severe cold snap in continental Europe and Britain.
Heavy snow stranded thousands of Christmas travellers in
Europe on Friday, threatening to prolong chaos at airlines and
rail networks and further boost fuel demand. []
Analysts said oil could continue its rally on strong global
demand and falling inventories in 2011, which promises to be a
strong year for risk assets as confidence about the global
economic recovery picks up.
The 19-commodity Reuters-Jefferies CRB index <.CRB> closed
on Thursday at its highest level since October 2008.
"With the continuous commodity Index posting new all time
highs and the S&P rising on supportive breadth, it is difficult
not to maintain our bullish commodity and equity outlook heading
into the first quarter of 2011," Barclays Capital said in a
note.
"The latest surge has brought $100 per barrel within range
for Brent crude in particular".
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For a graphic on prices: http://link.reuters.com/jam43r
Analysis on oil's impact in developing world: []
Preview of Cairo meeting: []
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OPEC SEES NO NEED FOR MORE OIL
OPEC's most influential oil minister, Saudi Arabia's Ali
al-Naimi, said on Friday he was still happy with an oil price of
$70-$80 per barrel and there was no need for an extra OPEC
meeting before the next scheduled one in June.
Arab OPEC ministers are meeting in the Egyptian capital this
weekend where they are expected to discuss oil production and
prices, but no formal decision on output will take place.
United Arab Emirates' oil minister said he wanted OPEC to
comply better with output cuts the group agreed in late 2008,
and added the current price did not reflect fundamentals. That
chimed with OPEC's stance that oil demand remains fragile and
speculators are to blame for the rally.
Speaking in Cairo, only Iraq's new oil minister said the
cartel could meet before June if market conditions changed but
then added that if a decision was taken to meet it would not be
"about price. It's about market conditions".
"OPEC has limited its number of meetings to limit market
disturbance," Abdul Kareem Luaibi told Reuters.
INFLATIONARY WORRIES
Oil's more than 30 percent climb from this year's low in May
has revived concerns that prices could once again impact
economic growth for fuel importing countries.
South Korea's finance minister warned on Friday that the
fifth-largest buyer of crude oil could face inflationary
pressures next year. []
In India, the government is expected to decide next week
whether to increase state-set fuel prices to cushion domestic
oil retailers []
China, the world's second-biggest energy user, raised
gasoline and diesel prices to record levels on Wednesday as it
aimed to encourage refiners to boost supplies to meet demand.
The government said it would prohibit transport companies
passing the rise on to the population. But higher commodity
prices helped raise Chinese consumer inflation to a 28-month
high in November.
(Additional reporting by By Sherine El Madany, Shaimaa Fayed
and Amena Bakr in Cairo, Seng Li Peng in Singapore; Editing by
Simon Webb and Sue Thomas)
