Oil prices surged above 49 US dollars a barrel today – their highest levels since the end of November – amid plunging temperatures in the US and fears of supply cuts.

OPEC hopes to put a lid on stubbornly-high crude prices by adding 500,000 barrels a day to its targeted output, but vigorous worldwide demand and a dearth of spare production capacity could combine to thwart its plans.

Saudi security forces have stormed an expat housing complex where suspected Islamic militants are holed up with a reported 50 hostages after attacking oil company offices.