Nov. 22 (Bloomberg) -- Crude oil in New York had its biggest two-day gain in two months and heating oil climbed on speculation colder weather in the U.S. and Europe will boost demand for fuel.

Home-heating demand in the northeastern U.S., which consumes 80 percent of the heating oil the country uses, will be one-third above average through Nov. 29, Weather Derivatives, a Missouri- based forecaster, said. The Energy Department may report tomorrow that oil supplies were unchanged. U.S. oil markets will be closed on Nov. 24 and 25 for the Thanksgiving holiday.

``It's weather-related and with Thanksgiving Day, there is a lot'' of buying now, said Peter Luxton, an analyst with Informa Global Markets in London. ``The cold weather has triggered'' this.

Crude oil for January delivery rose as much as $1.09, or 1.9 percent, to $58.79 a barrel in electronic trading on the New York Mercantile Exchange and was up 93 cents at 2:17 p.m. London time. The price has jumped 4.2 percent this week, the biggest two-day increase since the period ended Sept. 20. Prices are 21 percent higher in the past year.

Heating oil for December delivery gained 1.9 percent to $1.7421 a gallon on Nymex. Brent crude oil on London's ICE Futures exchange rose 98 cents, or 1.8 percent, to $56.32 a barrel.

Traders sometimes buy extra contracts to protect themselves against cold weather or political upheavals during a long vacation weekend, causing prices to rise, analysts have said.

Weather `Concern'

Prices are ``in a bit of a range'' and traders are buying ``before the long weekend,'' said Tony Machacek, a broker with Bache Financial Ltd. in London. ``Distillates are relatively plentiful, but there is obviously some concern about cold weather at the moment.''

Temperatures will average 7 degrees Fahrenheit below average in the northeastern U.S. through the middle of next week, Weather Derivatives said. Snow is expected to fall later this week across Michigan, Pennsylvania and western New York, said State College, Pennsylvania-based AccuWeather Inc. on its Web site.

Colder weather is also expected in Europe. The U.K.'s Met Office warned blizzards are likely to hit northern and eastern parts of the country later this week. Colder-than-normal weather is expected in much of Germany, Europe's largest heating-oil user, with freezing temperatures in Berlin, Bonn and Munich, according to U.S.-based forecaster Meteorlogix LLC.

Regular gasoline at the pump in the U.S., averaged nationwide, fell to $2.202 a gallon yesterday from $2.21 a day before, according to the AAA, the nation's largest motoring organization. Prices are down about 28 percent from a record $3.057 a gallon on Sept. 2.

Dwindling Supplies

U.S. oil supplies were probably unchanged at 321.4 million barrels last week, according to the median forecast in a Bloomberg survey of 11 analysts. The Energy Department publishes its weekly report on supplies tomorrow.

Distillate supplies probably gained 700,000 barrels last week, according to the survey. U.S. demand for distillates, a category that include diesel and heating oil, peaked in January in four of the past five years.

Traders are beginning to focus on the next meeting of the Organization of Petroleum Exporting Countries, in Kuwait on Dec. 12. OPEC wants to avert a glut of oil in the second quarter, Qatari Oil Minister Abdullah Hamad al-Attiyah said yesterday.

``The market is starting to speculate on the possibility that OPEC might cut,'' said Deborah White, a commodities economist at Societe Generale SA in Paris. ``They may announce the price they're prepared to defend and under what circumstances they would cut.''

OPEC members shouldn't extend the group's September offer to suspend its quota system and offer spare capacity for production, al-Attiyah told reporters yesterday at an oil conference in Doha, Qatar.

To contact the reporter on this story: Bill Murray in London at at wmurray1@bloomberg.net

Last Updated: November 22, 2005 09:19 EST