Crude oil prices rose in the wake of the US government report that showed a disappointing drop in inventories of crude oil, and under-realization of the refineries potential.

February crude rose $0.47 to $46.84 a barrel.

The U.S. Department of Energy yesterday issued a report that indicated a 3-million-barrel decrease in crude oil stocks that ended at the level of 288.8 million barrels, a 7% decline from a year ago. The supply of distillates that include heating oil and diesel showed a 1.9-million-barrel rise to 123 million barrels, 8% down from the past year.

Disruptions on the Iraqi pipelines in the Kirkuk oil fields bringing oil to the Turkish port of Ceyhan also factored into prices. Power disruptions in the south led to a 10% cut in February-June Basra Light sales, reducing them by 160,000 bpd.

The continuing spell of nasty weather in the North Sea prevented the production operations in the North Sea and at Latvia’s Ventspils terminal and in Turkey’s Bosphorus and Dardanelles straits.

Supply cuts caused by the OPEC decision to remove the excess of 1million bpd over the cartel’s quota added more strength to the prices.

Deborah White of SG Securities in Paris said “some of the OPEC ministers have sent signals that they’d like defend prices at $35 a barrel.”

OPEC ministers are going to meet on Jan. 30 and can cut the output by another 1 million barrels a day that is in excess of the cartel’s quota, according to Venezuela’s Energy and Mines Minister Rafael Ramirez. Mr. Ramirez told the reporters that he believed the current prices were ``comfortable’’ for oil producers and consumers.

Earth Satellite Corp., a Maryland-based weather consultant, predicts colder-than-normal temperatures in the US Northeast that consumes about 80% of the heating oil used by the nation in the period starting Jan. 14. Against the fact that the heating oil supplies are still about 9% below last-year level according to the US Energy Department, this bodes ill for oil prices.