(Updates prices, paragraph 2)
By Ikuko Kao
LONDON, Feb 25 (Reuters) - Oil rose above $99 in votalile
trading on Monday, bolstered by rises in prices of heating fuel
futures.
U.S. light crude for April delivery <CLc1> rose 36 cents to
$99.17 a barrel by 1848 GMT. London Brent crude <LCOc1> was 76
cents up at $97.77 a barrel.
"Gas oil is pulling up crude," said Mike Wittner, global
head of oil research with Societe Generale.
Gains in London's ICE gas oil futures and New York heating
oil futures surpassed crude oil due to cold snap in the U.S.
Northeast, the world's largest heating market, and in Europe.
Early in the session, ICE gas oil futures struck a record
high of $901.25 a tonne, adding to gains posted over the past
week. Gas oil inventories in Europe have remained lower than
last year.
New York natural gas futures rose to a two-year high.
Speculative funds flowed into oil last week as the contract
rallied to a record high above $101 a barrel on Wednesday.
"We are seeing little indication that fund infatuation with
commodities has waned, particularly as the global stock and
bond markets continue to struggle," MF Global said.
Support also came from the Turkish incursion into
oil-producing northern Iraq and foggy weather at a key shipping
channel in the United States.
DENSE FOG
Dense sea fog shut down traffic on the Houston Ship Channel
on Monday, the U.S. Coast Guard said.
The Houston Ship Channel serves the ports of Houston, Texas
City and Galveston. Eight refineries in Houston and Texas City
account for 13.5 percent of U.S. refining capacity.
The Turkish incursion at the weekend had helped prop up oil
prices. But it would not have any impact on oil supplies, Fatih
Birol, chief economist at the West's energy adviser the
International Energy Agency told Reuters.
Turkish troops engaged Kurdish PKK rebels in close combat
on Sunday in a major ground offensive into northern Iraq. But
an official in Iraq's state-owned Northern Oil Company said
Turkey's move would not disrupt Iraq's exports of crude from
its northern fields.
The market also was eager for any policy clues from OPEC
members ahead of the group's next meeting on March 5.
A senior Iranian oil official said on Monday there was
enough crude in the market and saw no reason for OPEC to raise
output, an Oil Ministry Web site said.
The remark came just a day after Iran's oil minister
Gholamhossein Nozari said he would support an OPEC output cut.
An industry consultant said on Monday the group's oil
supply is set to fall by 200,000 barrels per day in February
due to lower output from its top two producers, Saudi Arabia
and Iran.
The drop in supply suggests some members are trimming
output to prepare for seasonally lower demand in the spring,
Petrologistics said.
(Additional reporting by Richard Valdmanis in New York;
Editing by David Gregorio)
(Reporting by Ikuko Kao; editing by James Jukwey)
