LONDON, Oct 14 (AFP) - Oil prices jumped to new record highs Thursday as news of a decline in heating oil inventories rattled markets nervous about tight supplies with winter looming in key markets.
New York`s benchmark light sweet crude for delivery in November surged 96 cents to 54.60 dollars after about one hour of trade, the highest in the contract`s 21-year history.
It later stood at 54.22 dollars, a gain of 58 cents on Wednesday`s close.
In London Brent North Sea crude oil for November delivery climbed 50 cents to 50.55 dollars in late afternoon deals.
Commercial crude oil inventories in the week to October 8 surged 4.2 million barrels from the previous week to 278.2 million barrels, at the lower end of average for this time of year, the Energy Department report said.
But distillates -- mostly diesel and heating oil -- dropped 2.5 million barrels to 120.9 million, showing the effect of production and refinery problems in the Gulf of Mexico because of hurricanes.
"The figures are extremely bullish," said Societe Generale analyst Deborah White in Paris.
"The key figure for the market is this 2.5-million-barrel draw in distillates that was evenly split between diesel and heating oil," she added.
Heating oil inventories, in high demand in the northern hemisphere winter, declined 1.2 million barrels to 50.0 million. Diesel fell 2.1 million barrels to 68.2 million.
White noted that although crude oil stocks climbed by 4.2 million barrels, there was only a modest rise in sought-after light sweet crudes such as West Texas Intermediate and Brent, which are stored in the Atlantic basin.
And this rise was the result of a loan of oil to refiners from the US Strategic Petroleum Reserve, an emergency supply which is excluded from the Energy Department`s stock figures.
Traders shrugged at news that in Nigeria labour leaders and opposition activists were expected to suspend a nationwide general strike.
"The strike is still on," said Owei Lakemfa, chief spokesman for the Nigeria Labour Congress (NLC).
"But the NLC and civil society groups will meet this afternoon to review the next stage of the protest. The strike is likely to be suspended today and to resume after two weeks."
Nigeria, the world`s sixth largest exporter of crude, exports around 2.5 million barrels per day but the strike has not affected supplies so far, according to unions and oil companies.
Meanwhile OPEC`s president predicted that oil prices would continue to rise in the next two weeks on the back of a surge in demand.
"I believe that oil prices will continue to rise until the end of this month because demand is getting stronger," Purnomo Yusgiantoro, who is also Indonesia`s energy minister, told reporters in Jakarta.
World oil prices have more than doubled from about 20 dollars a barrel in New York at the start of 2002, surging by about 65 percent since the start of this year.
Adjusted for inflation, however, they remain far below the levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of 80 dollars a barrel in today`s money.