Oil prices rose sharply to above USD 41 in London on rising unrest in the Middle East and evidence that OPEC members have begun complying with agreed output cuts, traders said.Brent North Sea crude for delivery in February jumped USD 2.91 to USD 41.28 a barrel in late morning trade on London's InterContinental Exchange after rocketing almost five dollars earlier.New York's main contract, light sweet crude for February delivery, was up USD 2.74 to USD 40.45.Prices rose as escalating violence in Gaza raised fears of wider tensions in the oil-rich Middle East, traders said.However thin trade owing to the year-end holiday season made for some price volatility."Although ongoing tensions could keep things fairly well bid for a while, we suspect that prices will eventually buckle under the relentless barrage of poor macro-economic headlines," said Edward Meir, an analyst at MF Global.Israel's attacks on Hamas in Gaza also weighed on the dollar, making oil cheaper for buyers holding other currencies and in turn pushing up demand for the commodity.Analysts said the price gains were additionally supported by evidence that the oil producers' cartel OPEC was cutting its output following an announcement earlier this month to do so.The Organisation of the Petroleum Exporting Countries is starting to notify customers about the extent of production cuts, said Dave Ernsberger, Asia senior editorial director of Platts, an energy information provider.
