"If the (northern hemisphere) winter turns out to be colder than anticipated, the markets will run," said Esa Ramasamy, director for Asian oil markets reporting at Platts, an energy agency whose analyses are widely used as benchmarks for international spot trading.

"If this happens, you will see 55 dollars as not a problem any more. It becomes a reality and 60 dollars is within reach," Ramasamy told AFP.

The winter months in the northern hemisphere traditionally drive up demand for kerosene and diesel, which are used for heating.

Ramasamy said refineries have already started building their inventories for diesel and kerosene, leading to a sharp rise in demand.

"No refinery will keep low on inventories in winter and because the refining margin is so good, every refinery is running full capacity. Once that happens, there is a natural demand for crude," he said.

On the flip side, Ramasamy said a warmer than expected winter should cause prices to fall due to the high level of inventories.

Ng Weng Hong, editor of industry publication EnergyAsia.com, agreed that a colder winter will drive prices up further, with the continued violence in Iraq and other potential disruptions to oil supplies contributing to the volatility.

"It's going to go up, it's going to be one-way traffic," he told AFP.

"I think the immediate target is 55 dollars but whether we hit it or not is another matter.

"Winter is coming in North America and geopolitical problems have not been solved. All you need is a couple of terrorists to inflict effective damage on a pipeline and this will shake up the market further."

Ng also noted that, even at 50 dollars a barrel, there has been no let-up in oil demand with high prices, instead of dampening demand, sparking panic buying in turn.

"There are more guys buying because they think it's going to go to 60 dollars a barrel. Nobody is letting up," he said.