Oil prices broke above $55 a barrel today as concern lingered over thin world heating oil supplies ahead of the northern winter.
US light crude for December rose 66 cents to $55.20 a barrel and Brent crude in London rose 72 cents to $51.50 a barrel.
Prices surged to a record $55.67 yesterday after a Norwegian shipowners' group briefly threatened to shut down the country's output to resolve a deadlocked strike, but recoiled after the government stepped in to end the dispute.
Norway is the world's third largest oil exporter, and a halt in shipments would have stretched world supply to the limit ahead of the Northern Hemisphere winter when heating demand picks up pace.
The Organization of the Petroleum Exporting Countries has been pumping at nearly full throttle since the summer to meet the biggest annual leap in demand for a generation.
Last month's Hurricane Ivan continues to curtail Gulf of Mexico production, where more than 400,000 bpd remains shut in six weeks after the storm. The outage has impeded the seasonal stockbuild of winter fuels, with US heating oil inventories lingering 12 per cent below last year's level and inventories in big consumers Germany and Japan also lagging.
Stockpiles of middle distillates, which include heating oil and jet fuel, are expected to have fallen in the US for a sixth consecutive week in government data due to be released tomorrow. Supplies should be building to prepare for the spike in winter demand, which will depend largely on the timing and severity of cold weather in the heavy consuming US Northeast.