Oil rose towards $56 a barrel today on the back of a cold snap in the United States and political tensions in Iran.
US crude climbed 28 cents to $55.70 a barrel earlier, extending Friday's 2 per cent gain. London Brent crude rose 29 cents to $55.58.
An Iranian parliamentarian said on Saturday the country had begun installing 3,000 new atomic centrifuges for uranium enrichment - a process that can make atomic bombs. But the statement was swiftly rejected by an Iranian nuclear official.
The conflicting news raised concerns that simmering tensions between the United States and Iran, the world's fourth-largest oil producer, could swiftly worsen, leading to a replay of a price increase that helped push US crude to a record of $78.40 in July.
Analysts said rising violence in Nigeria also heightened worries of further supply cuts in the country, where a wave of attacks has forced the closure of a fifth of oil production capacity.
The Organization of the Petroleum Exporting Countries has said it would wait to assess the impact of existing supply cuts before calling for further reductions.