Halo

The ring around the Moon is caused by the refraction of Moonlight (which of course is reflected sunlight) from ice crystals in the upper atmosphere. The shape of the ice crystals results in a focusing of the light into a ring. Since the ice crystals typically have the same shape, namely a hexagonal shape, the Moon ring is almost always the same size.

Less typical are the halos that may be produced by different angles in the crystals. They can create halos with an angle of 46 degrees.

clearest pic

Moon Ring Weather Folklore
Folklore has it that a ring around the moon signifies bad weather is coming, and in many cases this may be true. So how can rings around the moon be a predictor of weather to come? The ice crystals that cover the halo signify high altitude, thin cirrus clouds that normally precede a warm front by one or two days. Typically, a warm front will be associated with a low pressure system which is commonly referred to as a storm. It is believed that the number of stars within a moon halo indicate the number days before bad weather will arrive. Give it a try the next time you observe a moon halo.

http://home.hiwaay.net/~krcool/Astro/moon/moonring/