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Crude Oil Rally Falters

The benchmark U.S. crude approaches $49 a barrel then falls back and closes unchanged.
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Updated from 2:19 a.m. EST

Crude oil prices Tuesday closed unchanged after touching $49 a barrel for the first time in almost two months, amid a bout of icy cold weather in parts of the U.S.

The February futures contract ended at $48.38 in Nymex floor trading, following a three-day holiday weekend.

The unseasonably cold weather renewed concerns about adequate heating oil supplies. The government will release its most recent inventory data tomorrow afternoon with traders expecting an increase in supply. With demand at a seasonal peak, weather patterns frequently play a key role in determining prices at this time of year.

Also affecting trading Tuesday was the International Energy Agency's revised estimate for crude oil demand in 2005. The agency said demand would grow by 100,000 barrels more than it had previously estimated.

Traders continue to speculate about whether OPEC will agree on another round of production cutbacks at its Jan. 30 meeting in Vienna, having already cut production by 1 million barrels a day at the beginning of this month.

The benchmark U.S. crude has been charging higher in recent weeks after suffering a steep price correction that took it some 25% below the record price of $55 a barrel in late October.