Oil nears $98/bl on Opec outlook, refinery fire

Crude oil rose to its highest in more than five weeks on speculation that Opec will curb production and refinery disruptions may limit fuel supplies.

The Organization of Petroleum Exporting Countries, or Opec, due to meet on March 5, may cut production as winter heating demand wanes, oil ministers from Algeria and Iran said in the past week. Gasoline jumped yesterday after an explosion shut Alon USA Energy Inc's Big Spring, Texas, refinery.

"The most important thing that could happen is potentially they could cut at the March gathering, "said Mike Wittner, head of oil research at Societe Generale SA in London.

"There's a good chance they could rollover formal quotas but quietly start cutting."

Crude oil for March delivery rose as much as $2.37, or 2.5 per cent, from its February 15 close to $97.87 a barrel in electronic trading on the New York Mercantile Exchange. That's the highest intraday price since January 9. The contract traded at $97.53 at 10:33 am London time.

Floor trading on the exchange was closed yesterday for the Presidents' Day holiday.

Electronic trades made yesterday will be booked on Tuesday for settlement because of the holiday.

Brent crude for April settlement rose as much as $1.97 cents, or 2.1 per cent, to $96.88 on London's ICE Futures Europe exchange. The contract traded for $96.52 a barrel at 10:35 am London time.