New York's main oil futures contract, light sweet crude for delivery in March, closed up 33 cents at $55.37 per barrel.
In London meanwhile, the price of Brent North Sea crude for March delivery settled up 33 cents at $55.43 per barrel.
"Given the resumption of normal winter weather, our view is that demand will continue to be quite robust in 2007 and more Opec (output) cuts in January and February" are likely, said Bart Melek, an analyst at BMO Capital Markets.
The US Department of Energy (DoE) said earlier yesterday that US stocks of distillate products, such as heating oil and diesel fuel, increased 700,000 barrels to 142.6 million in the week ended January 19. That confounded analysts' consensus forecasts for a decline of 250,000 barrels.
Demand for heating oil across the US northeast was expected to increase this week as temperatures have fallen in recent days amid snow storms in some areas.
"There was a bit of a surprise increase in the distillate numbers, but with the cold, it might change in the next few weeks.
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