Oil prices edged higher on Tuesday, topping the 2007 settlement high reached a day earlier after a weather report predicted more destructive storms along the Gulf Coast this hurricane season. Natural gas prices also jumped on the news.

Continued tensions between Iran and the West also kept a floor under oil prices, while the market looked ahead to today's weekly inventory reports from the Energy Department, The Associated Press reported.

Light, sweet crude for May delivery inched up two cents to settle at US$62.93, the highest settlement so far this year, on the New York Mercantile Exchange. The contract rose as high as US$63.05 during trading.

Brent crude for May rose 19 cents to US$64.60 a barrel on the ICE Futures exchange in London.

AccuWeather.com said yesterday that its chief hurricane forecaster expects this hurricane season to produce more powerful storms in the Gulf of Mexico, which could disrupt production of crude oil and natural gas in the area.

Natural gas leaped 24.9 cents to settle at US$7.503 per 1,000 cubic feet.

"The market tried to go down all day, but it finally got a little boost from the hurricane forecast," said Phil Flynn, an energy analyst at Alaron Trading Corp in Chicago. "That and Iran is still showing stubbornness against the global community caused the market to go up."

Iran detained 15 sailors and marines on Friday, triggering concerns it may lead to a cut in Persian Gulf exports and from Iran, the Organization of Petroleum Exporting Countries' second-largest producer behind Saudi Arabia.

Iran said Monday it was questioning the 15 to determine if they had "intentionally" crossed over into Iranian waters, a sign that it could be seeking a way out of the impasse. Britain maintains the men were in Iraqi territory.

Iran is already at loggerheads with the West over its uranium enrichment program, and has decided to partially cut cooperation with the UN atomic watchdog agency in response to the Security Council's vote over the weekend to approve additional sanctions on Tehran.

Vienna's PVM Oil Associates said markets remained ready for the possibility that "if the standoff escalates, it could eventually disrupt (crude) exports through the Straits of Hormuz."

Additionally, it predicted "a bullish forecast for products," alluding to expectations that Wednesday's US weekly petroleum supply report, a key indicator of usage in the world's largest energy consumer, will show relatively large declines in gasoline, diesel and heating oil inventories. Gasoline supplies have fallen for the past six weeks ahead of the summer driving season when demand usually peaks.

Analysts polled by Dow Jones Newswires estimate that the Energy Department's report will show a gain of 1.1 million barrels in crude oil inventories last week from the previous week. Gasoline supplies are expected to decline by an average of 1.8 million barrels, while distillate stocks -- which include heating oil and diesel fuel -- are expected to dip by 800,000 barrels.

Heating oil settled at US$1.7864 per gallon, up more than a penny, while gasoline futures rose half a cent to US$2.0730 a gallon. Heating oil and gasoline options for April expired yesterday.

Gasoline prices have seen a recent run-up as refinery disruptions keep supply under pressure and as traders anticipate the upcoming driving season. Earlier in yesterday's session, prices traded as high as US$2.0850 -- levels not seen since last August.