LONDON: World oil prices steadied Wednesday in quiet trade, as traders awaited a key report expected to show that recent freezing weather boosted heating fuel demand in the United States.

New York's main futures contract, light sweet crude for delivery in February, eased three cents to 78.84 dollars a barrel.

Brent North Sea crude for February won 20 cents to reach 77.84 dollars in London trading.

The US government's Department of Energy (DoE) will later publish its regular update on crude oil inventories for the week ending December 25.

Oil prices advanced Tuesday on expectations of a large drop in stockpiles in the United States, which is the world's biggest energy consuming nation, followed by number two China.

Market expectations are that US reserves of distillates, which include diesel and heating fuel, fell by 2.1 million barrels last week, according to analysts polled by Dow Jones Newswires.

Stockpiles of crude oil are forecast to slide by 1.7 million barrels, but gasoline or petrol inventories are seen rising by 400,000 barrels.

"Distillate demand was probably very decent as the weather was very cold last week on the US east coast," wrote Torbjorn Kjus, an Oslo-based analyst at DnB NOR Markets, in a research note to clients.

A fierce Christmas blizzard forced scores of US churches to cancel services last Friday as snow and freezing rain brought a holiday headache to millions across a huge swath of the country.

At least 24 deaths were attributed to the nasty storm system that blanketed the central United States beginning Wednesday, closing several interstate highways, stranding thousands of motorists in whiteout conditions and coating roads with a glaze of ice during one of the busiest travel periods of the year.

"We had some cold weather in the (US) and there is an expectation of a distillates inventories decline, as well as a crude oil inventories decline as we head towards the end of the year," added analyst Andy Lipow of Lipow Oil Associates.

The market is also jittery over geopolitical tensions sparked by the crackdown on protests by major crude producer Iran and from an oil transit dispute between Russia and Ukraine.

Global financial markets meanwhile face muted trading conditions this week because of year-end holiday celebrations.