SINGAPORE, Nov 26 (Reuters) Oil rose to a near record high on Monday, as colder U.S. weather and sustained weakness in the dollar drove prices once again toward the 0 a barrel mark.
U.S. light, sweet crude for January delivery rose 67 cents to .85 by 0120 GMT, building on last week's late gains and nearing the all-time high of .29 from last Wednesday.
London Brent crude rose 62 cents to .38.
''It could be through 0 at any moment, it looks like it has the horsepower to get there,'' said Peter MacGuire, managing director of Commodity Warrants Australia in Sydney.
''The questions are: where does the U.S. dollar go, and are we going to see more demand out of the U.S. as it starts to get cooler.'' The dollar's decline to a series of record lows versus the euro -- the latest on Friday -- has spurred buying in oil. The greenback hovered near that low on Monday as investors kept faith in further Federal Reserve rate cuts.
The onset of colder weather in the U.S. Northeast, a major consumer of heating oil for household use, has also aided the upswing in prices as traders bet higher demand will strain inventories that remain below seasonal norms.
Temperatures in the region on Monday were near their norms for this time of year, according to The Weather Channel Web site (www.weather.com), but the U.S. National Weather Center's six to 10-day outlook calls for colder-than-usual conditions.
Traders will be watching closely this week for any signals from OPEC ministers ahead of their Dec. 5 policy meeting in Abu Dhabi, when they will debate whether to raise output for a second time this year after their previous 500,000 barrel per day (bpd) increase, agreed in September, failed to stem the rally.
''What's their comment at or ? They understand the inflationary fears and the slowdown in the U.S. economy, it's at a very delicate stage,'' said MacGuire.
Some members of the group are advocating an increase in production, Iran's Oil Minister Gholamhossein Nozari said on Saturday. Most members have said publicly that they don't believe more oil is needed, or that an increase would not cool prices.
''Some countries agree with output increase and others believe there is a good balance between oil supply and demand,'' Nozari told a news conference.
The United States has urged OPEC to boost production because of shrinking oil inventory levels in developed economies and to help bring down prices that have surged to record levels.
A fire on a North Sea oil rig at the weekend has shut in about 5,000 barrels per day (bpd) of Brent crude production, a small portion of the important benchmark grade.
REUTERS SLD BST1131