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Oil climbs higher above $99, eyes OPEC

US light crude for April delivery rose 38 cents to $99.19 a barrel by 1005 GMT. London Brent crude rose 41 cents to $97.42.

Cold weather in the United States Northwest late last week, the world’s largest heating fuel market, also helped oil prices to edge up.

However, support might be limited, analysts said.

‘None of the above factors have much ’staying power’. The Turkish incursion, while troubling, will be of limited duration, and does not seem to be putting any production at risk,’ MF Global said in a research note.

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 on Sunday Iraq’s exports of crude from its northern fields will not be disrupted by Turkey’s move.

OPEC oil producer Iran, in a long standing row with the Western countries on its nuclear programme, warned on Sunday that they would be the ones to suffer if they passed a new UN sanctions resolution on the Islamic Republic.

Although concerns over immediate supply disruption was considered limited, speculative funds flowed into oil last week as it 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.

Speculators on the New York Mercantile Exchange increased long positions in crude, RBOB gasoline and heating oil contracts sharply last week, data from the US Commodity Futures Trading Commission showed on Friday.

The market is closely watching remarks from OPEC members ahead of the group’s next meeting on March 5.

Some OPEC ministers have said the was likely to keep the output level unchanged. Others said they supports cuts arguing the market was well supplied.

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.