Wednesday, October 26 2005 14:31 Hrs (IST) - World Time -

New York: Worries about a cold snap hitting the US northeast prompted a flurry of buying activity on commodity markets Tuesday, pushing up oil prices by more than three per cent.

New York's main contract, light sweet crude for delivery in December, jumped 2.12 dollars to close at 62.44 dollars a barrel.

In London, the price of Brent North Sea crude for December delivery rallied 2.00 dollars to 60.24 dollars per barrel in closing deals.

The market was already in a technical rebound when traders got a jolt from forecasts calling for snow and icy conditions hitting parts of Pennsylvania and West Virginia.

Although oil prices have retreated from recent highs, analysts said the market remains sensitive to any shift in demand or supply. Any unusually cold weather could increase demand for heating oil.

"We are starting to see a concern about a long and cold winter and that's played into the market," said Phil Flynn at Alaron Trading. "They are expecting maybe a snowstorm in the northeast and some colder temperatures in the Midwest in the next couple of days," said Flynn.

The same weather jitters drove natural-gas futures up over 10 percent to a record close Tuesday. The November contract rose 1.334 dollars to close at 14.338 dollars per million British thermal units, the highest-ever closing level for a front-month contract.

Flynn said reports of a power outrage in a refinery contributed to the bullish trend, with the market still on edge about the recovery from hurricanes Katrina and Rita.