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Oil Prices Touch $49 a Barrel

The benchmark U.S. crude gains amid new concerns about supply.

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.

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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.