* NYMEX floor closed for trading for Christmas holiday
* Oil price rally stokes inflation fears
* Arab OPEC ministers meet in Cairo this weekend, relaxed
with prices
(Releads, adds inflation worries, updates prices)
By Randy Fabi
SINGAPORE, Dec 24 (Reuters) - Oil rallied to its highest
price in more than two years on Friday, supported by unusually
frigid weather that has fueled demand, depleted supplies and
stoked inflationary worries from South Korea to India.
European benchmark ICE Brent crude for February <LCOc1>
hit an intra-day high of $94.74 a barrel, the highest level
since October 2008, before easing back to trade up 32 cents at
$94.57 a barrel by 0649 GMT.
Global benchmark U.S. crude futures <CLc1>, which hit a
26-month high of $91.63 on Thursday, did not trade on Friday
with the NYMEX floor closed for the Christmas holiday.
Brent, trading at a premium to U.S. crude, has surged
partly due to a severe cold snap in continental Europe and
Britain.
Snow and more frigid temperatures were predicted in parts
of Europe over the weekend, threatening to prolong chaos at
airlines and rail networks and further boost fuel demand.
[]
"With the upside surprise in oil demand continuing, and
the persistence of cold weather helping in rebalancing the oil
market further, prices are showing some urgency to enter a new
phase of dynamics," said analysts for Barclays Capital in a
weekly report.
"The latest surge has brought $100 per barrel within range
for Brent crude in particular.
INFLATIONARY WORRIES
Oil's more than 30 percent climb from this year's low in
May has revived concerns that prices could once again impact
economic growth for fuel importing countries.
South Korea's finance minister warned on Friday that the
fifth-largest buyer of crude oil buyer could face inflationary
pressures sparked by rising global liquidity and commodity
prices next year. []
In India, the government is expected to decide next week
whether to increase state-set fuel prices to cushion domestic
oil retailers from the pain of rising crude prices and ease
its own subsidy burden. []
China, the world's second biggest energy user, raised
gasoline and diesel prices to record levels on Wednesday as it
aimed to encourage refiners to boost supplies to meet demand.
The government said it would prohibit transport companies
passing the rise on to the population. But higher commodity
prices helped raise Chinese consumer inflation to a 28-month
high in November.
Still, economists expect the inflationary impact from
higher oil prices to be weaker than in the past in emerging
economies due to rising consumer demand and booming expansion.
EYES ON OPEC
With back-to-back 26-month highs, traders are now looking
for the Organization of the Petroleum Exporting Countries to
signal when it might begin pumping more crude.
Two key OPEC ministers hailed oil prices as "fair" on
Thursday, showing little inclination to pump more crude to
stop rising oil prices.
Arab OPEC ministers are meeting in Cairo this weekend
where they may discuss oil production and price, but no formal
decision on output will take place. OPEC's next scheduled
meeting is for June.
"Once you get around $100, if it is sustained and the
U.S., Euro area, UK and Japan continue to look weak in their
economic growth profile, then at that point you might see some
action (from OPEC)," said Ben Westmore, a commodities analyst
at National Australia Bank.
"But that is many months away and it is contingent on a
number of things."
U.S. economic data on Thursday showed new U.S. claims for
jobless benefits dipped last week and consumer spending
increased in November for a fifth-straight month, reinforcing
views of a solid economic growth pace in the fourth quarter.
[]
(Additional reporting by Seng Li Peng; Editing by Simon Webb)
