LONDON, Feb 4: Oil prices held firm on Wednesday even as a government report revealed a sharp rise in crude stockpiles in the United States, the world’s biggest energy consumer.

Brent North Sea crude for delivery in March rose two cents to $44.10 a barrel, off earlier highs of close to $45.

New York’s main futures contract, light sweet crude for March, climbed 29 cents to $41.07 a barrel.

The US Department of Energy (DoE) said that crude stockpiles soared by 7.2 million barrels last week, more than double the 2.9 million barrels forecast by analysts.

The sharp rise meanwhile underlined the current drop in world energy demand caused by the economic slump.

“Once again, the US DoE report appears bearish for crude” prices, said Calyon analyst Christophe Barret.

The DoE added in its closely-watched weekly report that stockpiles of US distillates, which include heating fuel, dropped by 1.4 million barrels last week.

The drop beat expectations of a reduction totalling only 600,000 barrels.

Crude futures had already won some support on Tuesday from strikes at refineries and a cold snap in Western Europe, but gains were capped by concern about the impact of the slowdown.

Resolution of the contract dispute involving US oil industry workers “helped to calm the market down considerably,” added Dave Ernsberger, senior Asia editorial director of Platts, a global energy information provider.

Ernsberger said this week’s cold snap and snow in Britain and Western Europe was not having a significant impact on oil prices.

“Cold weather is certainly bullish, but it will need to continue for at least one to two more weeks to have any impact on the enormous stockpiles in the market,” he said.

Crude oil prices tend to win support from cold weather because countries ramp up their demand for heating fuel to keep warm.

Analysts meanwhile noted that oil demand was still falling despite production cuts by the Organisation of the Petroleum Exporting Countries.—AFP