Oil Prices Touch $49 a Barrel

The benchmark U.S. crude gains amid new concerns about supply.
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Updated from 1:35 p.m. EST

Crude oil prices closed with a solid gain, after breaking the $49-a-barrel level again early Monday in the wake of a major winter storm in the northeastern U.S. this weekend.

The benchmark U.S. crude added 28 cents at $48.81, a two-month high, in Nymex floor trading. Prices also briefly touched $49 last week.

Traders bid up prices amid heightened demand for heating oil as unseasonably cold weather continued to hug the region, adding to a wintry mix thanks to a foot of snow in parts of the northeast.

The upcoming elections in Iraq at the end of the month are also raising concerns about new sabotage attacks on the oil industry infrastructure there, a factor that helped boost prices during much of 2004.

Traders continue to speculate on the possibility that OPEC members would agree to a second round of production cuts at its Jan. 30 meeting, having trimmed output by 1 million barrels a day as of Jan. 1.

Prices are now about 11% below their record high of some $55 a barrel touched in late October, having fallen close to $40 a barrel at the peak of the correction.