Oil prices edged further below $ 49 a barrel yesterday as the frigid US Northeast looked ahead to warmer conditions and some traders moved to the sidelines ahead of Iraqi elections and an Organization of the Petroleum Exporting Countries (OPEC) meeting. US light crude fell 23 cents to $ 48.58 a barrel, chipping away at the nearly $ 2 gains in the past two days as a blizzard blanketed the major US Northeast heating oil market.

The cold snap has boosted demand in the biggest regional heating oil consumer in the world to 16 percent above normal, the US National Weather Service said, but the frigid conditions are expected to subside by next week. US inventories of distillates, including heating oil, are thought to have fallen 2.4 million barrels in the week to Jan. 21 as homeowners stocked up ahead of the freeze, a preliminary Reuters poll of nine analysts found. A changing weather outlook for the month ahead may help soothe any reviving worries about a winter supply squeeze, with some forecasters now calling for warmer – not colder – than normal conditions for last part of the northern winter. Private forecaster WSI said on Monday the Northeast would be warmer than usual in February and March, echoing a similar outlook last week from the National Weather Service.

“Heating oil demand is dominated by the Northeast, where the warmer-than-normal temperature outlook should have a bearish impact on demand and price,” WSI said. Although heating oil stockpiles are still slightly below year-ago levels, they should last the rest of winter unless a sustained freeze sets in, said Jack Sullivan, chief executive of the New England Fuel Institute.

Oil traders are on alert for any surprises on Jan. 30, when Iraqis go to the polls and the OPEC meets to debate production policy. Iraq’s southern crude supplies have run relatively smoothly at about 1.5 million barrels per day (bpd) in the lead up to the elections, despite fears of new sabotage attacks. The country’s northern exports, halted for more than a month, are expected to resume flowing in about 10 days, barring more of the attacks that have plagued the line.

OPEC members looked to be moving toward a rollover in the cartel’s output ceiling, as prices hovering near $ 50 make it unlikely the cartel would tighten its taps despite fears of a potential oversupply in the second quarter. OPEC production fell 800,000 bpd in January as producers implemented their agreed 1 million bpd cut, tanker tracker Petrologistics said in a preliminary estimate.