World oil prices hit fresh 10-month highs

Oil prices hit fresh 10-month highs on Tuesday as a huge blast at a liquefied natural gas (LNG) plant in Algeria added to concerns over wafer-thin US oil supplies, which are being tested amid bitter winter cold.
The explosion in Algeria - the world's second largest LNG exporter - closed the Opec member's largest refinery and main oil export terminal. It has delayed shipment of some cargoes as result of the blast.
US light crude futures for February delivery hit a new 10-month high of $36.20 a barrel, up $1.13, the highest level since the US invasion of Iraq in March. London Brent crude futures for March rose 55 cents to trade at $31.12 a barrel.
"Energy markets continue to take support from a strong fundamental picture, with Opec statements and a deadly blast at the Skikda LNG plant in Algeria adding fresh price-positive news," said Barclays Capital in a market comment.
Prices marched higher after the Algerian explosion, which ripped through the vast petrochemical plant in the port city of Skikda on Monday, killing at least 23 people and shutting down all activity at the oil and gas refinery complex.
Energy and Mines Minister Chakib Khelil said operations had been shut as a preventive measure, and a shipping agent said all oil shipments from Skikda had been halted.
Officials said they believed a boiler at one of the gas units was the origin of the blast, which was felt for kilometres and destroyed three LNG trains.
Traders said the Algerian situation, combined with the threat of a general strike brewing within fellow Opec member Nigeria, and the continuing drop to freezing temperatures in the US, were supporting prices.
Meteorologists are forecasting extreme cold for the next three weeks in the United States east of the Rocky Mountains, with at least one forecaster, Joe Bastardi of AccuWeather, calling for the coldest winter there in 25 years.
US crude prices have shot up more than $8 a barrel, or 30 percent, since late September when Opec agreed to cut official output limits by 900,000 barrels per day.
Since then, demand has risen with the onset of the Northern Hemisphere winter and US fuel inventories have fallen to the lowest levels since the mid-1970s.
Saudi Arabia has said it is too early to predict what action Opec will take when it reviews production policy at its next meeting on February 10 in Algiers. On Tuesday Qatar said the cartel should not rush to set its output level.
Opec is worried that a big overhang of oil will trigger a collapse in prices in the second quarter when demand normally tails off at the end of winter. It is already pumping about 1.5 million bpd above its official ceiling of 24.5 million bpd, which excludes Iraq output.