SINGAPORE, Jan 18 Oil rose to above $ 52 a barrel on Thursday, recovering further from a

SINGAPORE, Jan 18 (Reuters) Oil rose to above $52 a barrel on Thursday, recovering further from a 20-month low as funds rushed in to buy after a cold snap in the United States triggered the long-awaited wintry demand for heating fuel.

U.S. crude futures rose 31 cents to $52.55 a barrel by 0425 GMT, having rebounded $1.03 a barrel on Wednesday when prices hit as low as $50.28 a barrel.

London Brent rose by 39 cents to $53.17 a barrel.

''People are panicking to buy back their short positions in reaction to the cold weather,'' said Tetsu Emori, an analyst at Mitsui Bussan Futures in Tokyo.

Following an arctic blast in the U.S. Northeast -- home to about 80 percent of the nation's heating fuel consumption -- heating oil demand was forecast to rise above average early in the week, private forecaster DTN Meteorlogix said.

The government's National Weather Service said temperatures could average below normal along the Eastern seaboard for another two weeks, though some warming could reach the Midwest and West next week.

However, funds buying might be short-lived as the icy weather came too late and oil supplies were already at ample levels.

''Still, stacked up against what has been a warm northern winter to date, the impact on comfortable inventories is going to be minor.

The timing as much as anything matters,'' said Tobin Gorey, commodity strategist from Commonwealth Bank of Australia, in a report.

STOCKBUILD Analysts polled by Reuters forecast imports to push up U.S.

weekly crude stocks by 100,000 barrels last week, the first rise in eight weeks. S] Distillate stocks were expected to have risen 1.9 million barrels, with gasoline seen rising 2.2 million barrels. The data will be released on Thursday, a day later than usual due to a U.S.

holiday on Monday.

Prices had dived earlier after Saudi Arabia said production cuts by the Organization of the Petroleum Exporting Countries were working well and an emergency meeting was unnecessary.

''There is no need to worry because the market is in a very healthy condition,'' the kingdom's oil minister, Ali al-Naimi, told reporters on Wednesday.

His comments came as 10 members of OPEC are seen lowering oil output further in January, improving compliance with a deal to cut production and prop up prices, according to an industry consultant.

The 10 members, which exclude Iraq and Angola and are subject to output limits, are expected to pump 27.1 million barrels per day (bpd) in January, down 200,000 bpd from December, Geneva-based Petrologistics said.

The market is also keeping an eye on the violence in key oil producer Nigeria, where Royal Dutch Shell cut output by 12,000 bpd at its Nigerian Ekulama 2 oilfield station after communal fighting in the area forced it to evacuate workers.

Nigerian militants said they were detaining indefinitely three workers at Agip, a unit of Italian energy firm Eni, even as they released a sick Italian oil worker who had been in captivity in the remote creeks of the Niger Delta since Dec. 7.

Africa's biggest producer have lost around 800,000 bpd, or more than a quarter of its output capacity, due to militant attacks and pipeline leaks in the Niger Delta, the country's main production area, for the past year.

REUTERS CS GC1145