Nov. 27 (Bloomberg) -- Crude oil pared gains because mild weather in the U.S. and Europe cut demand for heating.

Temperatures rose close to 10 degrees Celsius early today in New York City and may reach a high of 14 degrees Celsius in London. The seasonal norm is about 6 degrees in New York and 10 degrees in London.

``Mild weather across Europe is widely spoken about,'' said Rob Laughlin, a senior broker at Man Financial Ltd. ``But we may still stay above $60 for Brent.''

Crude oil for January delivery was up 8 cents at $59.32 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 12:57 p.m. in London. Brent crude oil for January settlement fell as much as 56 cents, 0.9 percent, to $59.47 in electronic trading on the ICE Futures Exchange in London. It traded at $59.54 at 1 p.m. London time.

Heating demand in New York will be 44 percent below normal until Dec. 1, the U.S. forecaster Weather Derivatives said Nov. 24. Temperatures in the U.S. Northeast will return to normal in the five days starting Dec. 2 and fall below normal in the next week, the National Weather Service said in a forecast yesterday.

Oil prices were expected to rise this week on speculation cooler temperatures will increase demand for heating fuel, according to a Bloomberg News survey from last week.

In the next few months ``we will be getting cooler in the Northern Hemisphere,'' said Greg Smith, a London-based analyst at investment adviser Fat Prophets. ``We've seen fairly mild weather to date, which is behind some of the weakness.''

OPEC Effort

Oil rose earlier after Saudi Arabia's oil minister said his country may support a second cut in OPEC's output this year to prop up prices, which have fallen about 24 percent since July.

The Organization of Petroleum Exporting Countries may trim production next month after it agreed in October to reduce output by 1.2 million barrels a day to ``stabilize'' prices, the London- based newspaper Al-Hayat reported yesterday, citing the Saudi minister, Ali al-Naimi. OPEC, which pumps about 40 percent of world's oil, would like to keep prices around $60 a barrel, the member states said in October.

Saudi Arabia ``is serious about it. I don't think the cut will be as large as the last time,'' and may total about 600,000 barrels a day, Fat Prophets's Smith said. OPEC ``will be serious about keeping the price above $60 a barrel.''

OPEC will discuss crude supplies at a Dec. 14 meeting in Abuja, Nigeria. The OPEC crude oil basket price rose 31 cents to $55.29 a barrel Nov. 24, the latest available data. The price is a weighted average of 11 crude blends produced by OPEC nations.

``Sixty dollars is a fairly stable level,'' said Jon Clark, oil and gas director at Ernst & Young LLP. ``The big issue isn't what the price is, I think, it's the volatility,'' after the price of New York-traded crude fell about $19 from the record high $78.40 a barrel it reached on July 14.

Officials in Saudi Arabia's oil ministry didn't return calls from Bloomberg News.

Rebound Likely

Benchmark U.S. crude oil is likely to average $70 a barrel next year, according to Dallas hedge fund manager Boone Pickens. Ed Morse, an economist at Lehman Brothers Inc., the fourth-largest U.S. securities firm, predicts $72. Either would top the average price for New York oil futures so far this year, $66.73 a barrel.

The dollar fell for a fifth day against the euro, the longest slide in seven months. The decline took the currency to its lowest since March 2005, as traders increased bets the Federal Reserve would cut interest rates in the first quarter. Oil and most other commodities are priced in dollars.

Gold, copper and corn gained as the dollar's slide made them cheaper outside the U.S. OPEC may examine the U.S. dollar price against other currencies when the group makes its decision next month about supplies, analysts said, including Veronica Smart at the Newmarket, England-based Energy Information Centre.

``Weakness in the U.S. dollar is going to drive these commodity prices higher,'' Smith said. ``The U.S. dollar's story is an additional fillip to the strength of commodities.''

The U.S. currency fell 0.22 cents to $1.311 per euro as of 1:01 p.m. in London compared with $1.3088 late on Nov. 24.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.netChristian Schmollinger in Singapore at Christian.s@bloomberg.net

Last Updated: November 27, 2006 08:20 EST