The price of Brent crude has increased by 5% after cold weather in the US and Europe lifted demand for heating oil.

Reuters reported that Brent LCOc1 increased $1.50 at $30.75 per barrel, while US crude CLc1 was up $1.26 at $30.79 a barrel.

While crude futures on both sides of the Atlantic wait for their initial weekly gain this year, analysts warned that the price rise may not be sustainable due to increasing inventories amid continuous excess production.

"The projected slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels are likely to keep the market oversupplied through 2016."

Earlier this week, the International Energy Agency said the global oil market would remain oversupplied for at least another year.

The agency said: "A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels, should international sanctions be eased, are likely to keep the market oversupplied through 2016."

The cold weather in Europe and North America will be followed by a warm start to winter in large parts of the northern hemisphere, leading to weaker demand for oil.

Reuters quoted ANZ bank as saying: "More stable global markets are likely to see speculative buying re-emerge in commodities that have suffered heavy losses in recent weeks. However, these rallies are likely to remain short-lived."

According to the US Energy Information Administration (EIA), US crude inventories increased four million barrels in the last week, compared with analyst estimations for a growth of 2.8 million.

The price of OPEC basket of thirteen crudes stood at $22.89 a barrel on Thursday, compared with $22.48 traded during the previous day.