* Cold weather in US, Europe boosts demand
* Crude up more than 40 pct from 2010 low
* Prices not affecting economic growth yet
(Releads, updates prices)
By Randolph Fabi
SINGAPORE, Dec 23 (Reuters) - Oil prices climbed toward a
two-year high on Thursday as cold weather in the United States
boosted demand, slashed stockpiles and contributed to a
stronger-than-expected rise in fuel consumption in 2010.
U.S. crude for February <CLc1> rose 25 cents to $90.73 a
barrel by 0714 GMT, after settling at the highest level since
October 2008 on Wednesday. ICE Brent crude <LCOc1> traded 14
cents higher at $93.79.
Abnormally cold weather in the United States and Europe
have spurred the rally above $90, the latest leg in a more
than 40 percent rise from a year low in May.
"Oil has risen as ... inventories have fallen more than
expected due to the cold weather in the northern hemisphere,"
said Serene Lim, an oil analyst at ANZ.
For a graphic on crude oil price surge:
http://link.reuters.com/jaw43r
Stockpiles in the world's biggest oil user have fallen by
19 million barrels since Nov. 26, roughly equivalent to one
day of U.S. fuel consumption and the biggest three-week drop
since 1998.
Forecaster AccuWeather.com expects temperatures in the
U.S. Northeast, the world's largest heating oil market, to
average mostly below normal for the next week, with slightly
milder readings later this month.
U.S. heating oil demand was expected to average 4.6
percent above normal this week.
In Europe, fresh snow forecasts threatened to prolong
chaos caused by a cold snap, with airlines and rail networks
struggling to restore normal services.
DEMAND REBOUND
Despite oil's steady climb, prices likely have further
wiggle room before they begin to impact economic growth in
oil-consuming countries, analysts said.
"Oil prices anywhere above $110 will start to eat into
economic growth," Lim said.
A Reuters poll showed that oil demand this year has
recovered from the global economic slowdown far faster than
anyone had predicted earlier in 2010. While growth was
expected to slow in 2011, demand would still reach a new
all-time high of 88.6 million bpd. []
The increase in fuel consumption was centred on the
developing world, with one third of the 1.5 million
barrel-per-day (bpd) global demand growth in 2011 coming from
China, according to the survey of 12 top oil-tracking analysts.
China's apparent oil demand rose 13.9 percent from a year
earlier to a record-high of 9.34 million bpd in November,
Reuters calculations from official data showed. []
(Additional reporting by Seng Li Peng; Editing by Himani
Sarkar)
