Its previous nine-year peak of $26.15 was struck on December 15 amid heavybuying at that time as a precaution against possible new year disruptions bythe millennium bug. Fresh bullish sentiment has now taken hold amidforecasts that the US Northeast, the world's biggest heating oil market, islikely to remain in the grip of a cold snap for another 10-12 days.

"Cold weather is clearly a big driving force at the moment," said Londonbrokers GNI. "Should the cold weather spread to Europe, then Opec will besitting pretty." Temperatures across the US northeast were expected to besix to 12 degrees Fahrenheit below normal on Wednesday, Boston-based WeatherServices Corporation said.

Washington voices concern over prices
The US energy secretary Bill Richards expressed concern on Tuesday over thisyear's fresh spurt higher in crude oil and heating oil markets. He plans toraise the issue of prices when he meets oil ministers of major US petroleumsuppliers including Saudi Arabia later this month.

Richards has been urged to sell oil from the US Strategic Petroleum Reserveto counter Opec's policy and push down prices. But he has said the reservewould be tapped only in a supply emergency and not as a way to controlprices.

Concerns that the Organisation of the Petroleum Exporting Countries willmaintain a squeeze on supplies this year have bolstered crude's 13 per centgain in the past nine days. Signals have come from many Opec members thatthey favour keeping supply limits beyond an end of March expiry despitefalling stockpiles of petroleum.

A group of Opec ministers last week recommended that course of action beapproved when the group of Middle East, Asian and African countries meets toset policy on March 27. Last week Saudi Arabian oil Minister Ali al-Naimisaid that if market conditions remained as they were, he saw no need tochange the output policy, possibly even for the whole of 2000.

The supply curbs, put in place in March 1999 to cut Opec output by 4.32million barrels per day, were to last a year. Opec's adherence to the outputcuts has generally exceeded expectations and succeeded in lifting pricesfrom sub-$10 lows in early 1999.

UN secretary-general Kofi Annan provided a further bullish signal withcomments on Tuesday that Iraqi oil exports are likely to slip by about200,000 barrels a day without a marked acceleration in approval of spareparts for Iraq's oil industry.

In a report to the UN security council, Annan said exports could be expectedto run at 1.95-2.00 million bpd compared to actual supplies of 2.1646million during the previous 180-day phase of Iraq's UN oil-for-foodexchange.

-- (Reuters)