Oil rises above $61 ahead of U.S. cold spell

SINGAPORE, Nov 29 (Reuters) Oil rose above on Wednesday on expectations that colder weather for the U.S. Northeast would boost demand in the world's top heating oil market.

U.S. light crude rose 9 cents to .08 a barrel by 0628 GMT, after climbing 67 cents on Tuesday to take gains for the week towards SINGAPORE, Nov 29 (Reuters) Oil rose above $61 on Wednesday on expectations that colder weather for the U.S. Northeast would boost demand in the world's top heating oil market.

U.S. light crude rose 9 cents to $61.08 a barrel by 0628 GMT, after climbing 67 cents on Tuesday to take gains for the week towards $2. London Brent crude traded 9 cents higher at $61.30 a barrel, extending 77-cent gains on Tuesday.

''Colder weather is on its way to the U.S. and the oil market is still boosting prices to reflect that,'' said Tobin Gorey, commodity strategist at Commonwealth Bank of Australia.

Private forecaster AccuWeather said on Monday that cold weather would hit the U.S. East Coast by the weekend, ending a stretch of above-normal temperatures that has curbed fuel demand.

Prices are still in a two-month trading range of $58-$62 a barrel, with the market looking for further direction on U.S demand strength from weekly government inventory data due later on Wednesday.

''Ahead is the U.S. inventory report so there was probably a little short-covering ahead of that report. We're not expecting oil prices to break out of their range for now,'' Gorey said.

Analysts polled by Reuters expected that U.S. crude stocks fell by 100,000 barrels last week as refineries cranked up production.

Distillate stocks were seen up by 400,000 barrels and gasoline stocks by 500,000 barrels, the poll showed.

Oil also has been buoyed by a weaker dollar, which slid to a fresh 20-month low against the euro on Wednesday, which makes oil cheaper for non U.S.-dollar buyers.

Traders are also looking ahead to OPEC's meeting on Dec. 14.

''Despite the market's scepticism on the effectiveness of OPEC action, we see the primary danger as being that short-term price weakness could lead OPEC to overtighten the market,'' Barclays Capital said.

The Organization of the Petroleum Exporting Countries decided to cut output by 1.2 million barrels per day from Nov. 1 to stem rising inventories and falling prices, and Saudi Arabia said on Saturday the group would cut output again if the previous curbs failed to balance the market.

REUTERS CS ND1250 . London Brent crude traded 9 cents higher at .30 a barrel, extending 77-cent gains on Tuesday.

''Colder weather is on its way to the U.S. and the oil market is still boosting prices to reflect that,'' said Tobin Gorey, commodity strategist at Commonwealth Bank of Australia.

Private forecaster AccuWeather said on Monday that cold weather would hit the U.S. East Coast by the weekend, ending a stretch of above-normal temperatures that has curbed fuel demand.

Prices are still in a two-month trading range of - a barrel, with the market looking for further direction on U.S demand strength from weekly government inventory data due later on Wednesday.

''Ahead is the U.S. inventory report so there was probably a little short-covering ahead of that report. We're not expecting oil prices to break out of their range for now,'' Gorey said.

Analysts polled by Reuters expected that U.S. crude stocks fell by 100,000 barrels last week as refineries cranked up production.

Distillate stocks were seen up by 400,000 barrels and gasoline stocks by 500,000 barrels, the poll showed.

Oil also has been buoyed by a weaker dollar, which slid to a fresh 20-month low against the euro on Wednesday, which makes oil cheaper for non U.S.-dollar buyers.

Traders are also looking ahead to OPEC's meeting on Dec. 14.

''Despite the market's scepticism on the effectiveness of OPEC action, we see the primary danger as being that short-term price weakness could lead OPEC to overtighten the market,'' Barclays Capital said.

The Organization of the Petroleum Exporting Countries decided to cut output by 1.2 million barrels per day from Nov. 1 to stem rising inventories and falling prices, and Saudi Arabia said on Saturday the group would cut output again if the previous curbs failed to balance the market.

REUTERS CS ND1250