LONDON, Sept 30 (AFP) - A shortage of heating oil appears on the horizon this winter in Europe and the United States, where inventories are in short supply and refinery capacity insufficient to meet growing demand as colder weather sets in, analysts said Thursday.
In Europe, vigorous demand worries the oil market most, while in the United States, the main fear is refineries' lack of production capacity, particularly after the devastation left by Hurricane Ivan.
Both regions ware meanwhile concerned about tightness of their oil stocks.
According to analysts, such worries reduce further the prospect of a sustained fall in oil prices, which this week rocketed to 50.47 dollars a barrel in New York -- the highest level in the contract's 21-year history.
"In the same way that gasoline shortages did earlier this year, tight winter heating fuel markets look likely to exert strong upward pressure on crude oil prices over the coming months," Barclays Capital analyst Kevin Norrish said.
"There is a growing realisation that stocks of heating oil (in the US) are too low going into winter and that, given the limited ability of refiners to ramp up production, heating oil will be exceptionally tight," he added.
In the wake of destruction caused by Hurricane Ivan to oil terminals in the Gulf of Mexico, US distillate stocks, which include heating oils, have tumbled by 3.0 million barrels to 125.5 million over the past two weeks, 3.6 percent below the level of stocks during the same period in 2003.
"In the US there are serious problems," GNI-Man Financial trader Robert Laughlin said. "Stocks are well below last year's level year-on-year and refiners are working flat out.
"The refineries have been disrupted by weather conditions and we are running into the winter with substantially lower stocks than we had in the last year or even in the last five years."
He added: "The forecast is that we could get a harsher, colder winter this year than last."
Societe Generale analyst Frederic Lasserre said the refineries "will be unable to replace the lost stocks" in time for winter, especially since global demand for crude, from which heating oil is distilled, is forecast to rise by 2.0 million extra barrels per day in the fourth quarter.
Meanwhile, distillate stocks in Europe are close to historic low levels.
"We are in an extremely fraught situation in Europe," Lasserre said.
"Demand is up by 2.0 percent at the same stage last year and stocks are low."
Supplies of heating oil are being affected in part by the recovery of the airline industry, noted Lasserre. With airlines requiring more kerosene to power their planes, less domestic heating oil is being sourced from crude, he said.
Worsening the situation is the fact that German households are delaying stocking up on heating oil ahead of winter.
"Normally they start to fill their vats in July and August," Lasserre said. "But this year, because of the surge in prices in August, they have delayed their buying. Except prices have not fallen and they are now obliged to buy at a high price."
Adding further headache is the fact that European refineries are set to undergo a number of maintenance programmes until November, reducing production.
Finally Europe is this year faced with severe competition from Asian countries, notably China, to secure gasoil from the Middle East. Gasoil, similar to heating oil, is used to power domestic appliances.