Oil prices jumped more than a dollar, climbing above $48 a barrel yesterday after US data showed the disruption caused by Hurricane Ivan had eaten into fuel stocks.
Heating oil futures zoomed to record levels as concerns grew that stocks could prove inadequate for the northern hemisphere winter.
US light crude leapt $1.29 to $48.05, only $1.35 below the $49.40 all-time high struck on August 20.
London Brent crude gained $1.21 to $44.60 a barrel.
In the week ended September 17, US crude stocks fell by 9.1 million barrels to 269.5 million following Hurricane Ivan, which delayed imports into the world's biggest consumer.
The draw, revealed by government data, was the eighth in as many weeks and took stocks to a deficit of nearly 14 million barrels compared with the same time last year.
"Stocks last week, this week and probably continuing into next week will have been disorganised by the hurricanes and until we get a clear sign that inventories are building, the markets are going to be volatile," analyst Adam Sieminski of Deutsche Bank said.
Ivan swung through the Caribbean and into the Gulf of Mexico last week, disrupting production and refinery operations.
Distillate stocks fell 1.5 million barrels to 126.8 million barrels, according to the government report. Distillate supplies are increasingly important to oil markets ahead of winter, when heating demand increases.
US heating oil futures rose 3.21 cents to $1.3350 a gallon after hitting a session peak of $1.3360, an all-time high.
Concerns about inadequate stocks are made worse by worries about security of supply.
Russian oil major YUKOS, which is struggling to pay a $3.4 billion tax bill, yesterday was forced to cut production.
Its main subsidiary Yuganskneftegaz cut output by 35,000 barrels per day (bpd), or two per cent of YUKOS' production, after a power firm switched off supplies for non-payment, Interfax news agency reported.
However, pipeline monopoly Transneft said it believed YUKOS' exports to Europe were safe after it agreed to accept payment of export shipping fees in crude oil and not cash.
Adding to the uncertainty are continued violence in Iraq and attacks on its oil infrastructure, as well as rising tensions between Iran and the United Nations over Tehran's nuclear ambitions.