Oil hovered around its highest levels in more than two years on Friday, supported by cold weather across the globe, appetite for risk assets and no signals from OPEC it was prepared to arrest the rally.

European benchmark ICE Brent crude for February hit $94.74 a barrel, its highest level since October 2008, before easing to around $93.90 by 6:15 a.m. EST in thin trade.

Global benchmark U.S. crude futures, which hit a 26-month high of $91.63 on Thursday, did not trade on Friday with the NYMEX floor closed for the Christmas holiday.

Brent, trading at a premium to U.S. crude, has surged partly due to a severe cold snap in continental Europe and Britain.

Snow was forecast in parts of Europe over the weekend, threatening to prolong chaos at airlines and rail networks and further boost fuel demand.

Analysts said oil could continue its rally on strong global demand and falling inventories in 2011, which promises to be a strong year for risk assets as confidence about the global economic recovery picks up.

The 19-commodity Reuters-Jefferies CRB index closed on Thursday at its highest level since October 2008.

With the continuous commodity Index posting new all time highs and the S&P rising on supportive breadth, it is difficult not to maintain our bullish commodity and equity outlook heading into the first quarter of 2011, Barclays Capital said in a note.

The latest surge has brought $100 per barrel within range for Brent crude in particular.

INFLATIONARY WORRIES

Oil's more than 30 percent climb from this year's low in May has revived concerns that prices could once again impact economic growth for fuel importing countries.

South Korea's finance minister warned on Friday that the fifth-largest buyer of crude oil could face inflationary pressures next year.

In India, the government is expected to decide next week whether to increase state-set fuel prices to cushion domestic oil retailers

China, the world's second-biggest energy user, raised gasoline and diesel prices to record levels on Wednesday as it aimed to encourage refiners to boost supplies to meet demand.

The government said it would prohibit transport companies passing the rise on to the population. But higher commodity prices helped raise Chinese consumer inflation to a 28-month high in November.

Still, economists expect the inflationary impact from higher oil prices to be weaker than in the past in emerging economies due to rising consumer demand and booming expansion.

U.S. economic data on Thursday showed new U.S. claims for jobless benefits dipped last week and consumer spending increased in November for a fifth-straight month, reinforcing views of a solid economic growth pace

OPEC NOT TO ROCK THE MARKET BOAT

OPEC ministers have so far hailed oil prices as fair, showing little inclination to pump more crude.

Arab OPEC ministers are meeting in Cairo this weekend where they may discuss oil production and price, but no formal decision on output will take place. OPEC's next scheduled meeting is for June.

Libya's top oil official, Shokri Ghanem, said the country was producing 1.5 million bpd at the moment while having capacity of 2 million.

Production is according with our international commitment, in particular our OPEC commitment, and in the meanwhile we don't want to rock the boat of the market, he said.

OPEC most influential minister, Saudi Arabia's Ali al-Naimi said he was still happy with the oil price at $70-$80, but did not say what could be done to bring them back to that level.

(Additional reporting by Seng Li Peng; Editing by Simon Webb and Sue Thomas)

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