Oil prices rose above the $48 mark on speculation that the cold weather in the US Northeast may last longer than expected, worries about unrest in Iraq, and increased demand growth forecasts from OPEC.

March crude rose $0.74 to $48.05 a barrel.

OPEC gave problems from non-OPEC countries and the further growth in the Chinese economy as reasons for a rise in demand for its oil that the organization expects to hit 28.56 million barrels a day in the first quarter, up 390,000 barrels, and 27.68 million barrels a day in the second quarter, up 540,000 barrels.

The Energy Information Administration issued a report on Wednesday saying the US crude stocks added 3.4 million barrels, taking them to levels that are 8% above last year in the biggest gain since Oct. 29.

Heating oil supplies are down 500,000 barrels, but the deficit over last year shrank to just 4% in the wake of warmer winter weather.

Another factor that contributed to the price rise is the concern that OPEC may decide to cut output in its January 30 meeting.

Adding to the worries about supply are the production stability concerns in Iraq where militants have stepped up violence in anticipation of the elections that are also scheduled for January 30.US expects violence to increase as the elections approach.