NEW YORK (AFP) - Crude oil futures closed above 48 dollars in New York for the first time in nearly a month as prices flirted with record highs in response to a slump in US inventories.
The November contract price on the New York Mercantile Exchange surged 1.59 dollars to 48.35 dollars a barrel at the close.
With the latest spike, the futures price moved closer to the all-time record close on August 19 of 48.70 dollars and the intraday record of 49.40 dollars on August 20.
Prices in London also shot higher, with the Brent futures price for November delivery hitting 44.93 dollars, a rise of 1.54 dollars.
The surge came after news that US oil inventories tumbled to their lowest levels since February last week in the wake of Hurricane Ivan.
The US Department of Energy said crude reserves fell by 9.1 million barrels in the week to September 17 to 269.5 million barrels, the lowest levels since February 6.
The American Petroleum Institute said its survey showed an even steeper drop of 12.9 million barrels to 266.7 million.
Energy Department officials acknowledged that the inventories were well below normal seasonal levels at a time when demand for heating oil begins to rise.
"This was one of the largest week-on-week draws in history," said Jason Schenker at Wachovia Securities.
"Furthermore, it comes on the heels of declines in crude inventories totaling almost 27 million barrels over the previous twelve weeks. This means, that we are entering peak heating oil season having experienced draws in excess of 35 million barrels over the past three months."
Shenker added that there appears to be little relief in sight for oil prices.
"The trend in oil prices shows no sign of turning," he said. "The run-up in the price of oil is far from over."
Hurricane Ivan, on the heels of other major storms in the area, sharply curtailed production in the Gulf of Mexico.
The DoE report also noted that US imports were down 1.5 million barrels last week because the hurricane limited deliveries.
"The numbers were pretty bullish," said Bill O'Grady at AG Edwards. "Ivan was a big deal."
"The market was geared to receive deep crude stock falls, given all the disruption from hurricane Ivan last week -- although not quite so deep," said Peter Hills, analyst at energy information provider ICIS-LOR.
But the analysts said much of the price increase was based on speculation and could reverse as inventories are rebuilt in the United States.
O'Grady said he nonetheless sees a likelihood of 50-dollar oil prices "sometime in the next six months."
Traders were also watching tropical storm Jeanne's path after it caused devastation in Haiti, and as it travelled towards the Gulf coast.
Another factor supporting prices was the ongoing financial crisis at Russia energy giant Yukos, which faces multi-billion dollar tax demands from the Moscow authorities.
Russia's nature ministry may next week strip the embattled Yukos oil giant's chief production subsidiary of licenses, the ITAR-TASS news agency reported.
The ministry may next week consider revoking the licenses from Yuganskneftegaz, which accounts for 60 percent of Yukos's oil output and which is due to be auctioned to meet tax demands the besieged Yukos is unable to pay.
The licenses could be revoked because Yukos has delayed payments on current taxes, including an extraction tax, Yukos's spokesman Alexander Shadrin was quoted by ITAR-TASS as saying.