LONDON (AFP) - Oil prices struggled to climb amid profit-taking but remained above 54 dollars on worries of a winter supply crunch after a fifth straight weekly fall in US heating fuel stockpiles.
The price of reference light sweet crude for delivery in December eased one cent to 54.40 dollars a barrel in early deals on the New York Mercantile Exchange.
The November contract, which expired at the close of trading on Wednesday, shot to a high of 55.20 dollars a barrel before ending at 54.92, up 1.63 dollars on the day and one cent shy of a record settlement.
In London Brent North Sea crude oil for December delivery rose eight cents to 50.60 dollars in late deals Thursday.
"There is some profit-taking and a bit of consolidation," GNI-Man Financial trader Keith Pascall said.
"Prices will remain buoyant but I don't think they will go up in a straight line. We will see some correction every now and then. I think prices are going to go higher because of the distillate figures that we saw" Wednesday.
A US Department of Energy weekly snapshot of oil stocks showed stocks of distillates -- mostly diesel and heating oil -- fell 1.9 million barrels to 119.0 million in the week to October 15. It was the fifth consecutive weekly decline.
A key distillate, heating oil, slipped 500,000 barrels to 49.5 million.
"Prices are supported by the strength in middle distillates, in particular gasoil and heating oil," said Prudential Bache broker Christopher Bellew.
"The market is still worried about winter availability."
Inventories of distillates have dropped heavily following supply problems in the hurricane-battered Gulf of Mexico.
"Distillate's 1.9-million-barrel stockdraw was double market expectations," Societe Generale (SG) analysts wrote in a note to clients.
"Apparently, product pipelines from the Gulf Coast are still a bottleneck, trapping product on the Gulf Coast."
The US Department of Energy said also that crude oil inventories rose 1.2 million barrels from the previous week to 279.4 million barrels, but this provided little comfort for traders.
"Commercial crude stocks will remain a non-issue unless and until the market comes to believe that crude shortages are cutting refinery runs," SG analysts said.
Market watchers are not ruling out the chances of crude futures prices surging past the 60-dollar level.
"We have room to go up to more than 60 dollars," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.
OPEC's president Purnomo Yusgiantoro urged the cartel's members and other oil-producing nations to raise output to meet the rising demand in an already overburdened market ahead of the northern hemisphere winter.
"Oil demand is increasing ahead of the winter. I ask OPEC and non-OPEC producers to increase oil production to ensure there is enough supply in the market," Yusgiantoro told reporters in Jakarta.
OPEC agreed at a meeting in Vienna last month to raise its official production ceiling by one million barrels per day to 27 million from November 1, but the decision left markets unmoved.
The cartel is due to meet next in Cairo on December 10.
Economic policymakers are growing increasingly concerned about the impact of an oil price spike on global growth.
Eurozone finance ministers expressed disquiet late Wednesday at a new surge in oil prices with France calling for urgent action by the European Union to address the latest threat to the bloc's economic growth.
"In view of the urgency of the problem currently facing our countries, I definitely want us to adopt as soon as possible a series of effective measures," French Finance Minister Nicolas Sarkozy said in a letter to colleagues at a meeting in Luxembourg.
10-21-2004, 18h59