Oil prices edged higher on Monday on the prospects of higher demand for heating as the first major winter storm hit the United States and as OPEC pressed its case to keep prices high.

U.S. benchmark crude was up 22 cents at $30.95 per barrel, helped by a rally in natural gas futures prices while January Brent crude rose 26 cents to $29.00.

Traders in Asia said buying of natural gas futures led the oil complex higher after more than a foot of snow fell in the U.S. northeast region, the biggest heating oil market in the world.

January natural gas rose more than three percent to $6.33 per million British Thermal Units (BTU) compared with Friday and was up 35 percent since November 24 when the market started to price in concerns of colder weather.

"Things are definitely up because of the storm over the weekend," said a trader.

U.S. January heating oil was up 0.81 cent, or close to one percent, at 87.17 cents a gallon.

The three-day storm has rolled up the northeast coast of the United States two weeks before the official start of the winter season, sparking concern that strong demand for heating will draw down oil and natural gas supplies.

"It is still snowing and the northern parts of New England are going to get a lot more before this blows out to sea," National Weather Service meteorologist Charlie Foley said on Sunday.

Forecasters said heating energy demand in the northeast would average well above normal in the next few days.

Jitters over rising demand come just as Abdullah al-Attiyah, OPEC's president, said the oil cartel might decide to cut its official supply limit of 24.5 million barrels per day (bpd) in February.

"If we need to cut, we will do it," Attiyah, also Qatar's oil minister, told reporters on the sidelines of an oil conference in Doha.

He said he expected an oil surplus of 2.5 million bpd in the second quarter of 2004, when demand traditionally falls as northern hemisphere temperatures warm up following winter.

OPEC, which controls half the world's crude exports, said last week following a ministerial meeting it would leave its production rates unchanged for now but would move aggressively to shore up oil prices early next year.

The group wants to keep oil prices around $30 a barrel to offset the weakening trend of the dollar, the currency used for international oil trading.

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