Oil prices held near historic highs over $53 a barrel on Tuesday, with global supplies hounded by outages that were thwarting efforts to build US heating oil inventories ahead of the winter.
US light, sweet crude oil futures were trading up 10 cents at $53.74 a barrel, having hit a record high $53.80 on Monday, the fifth successive day of all-time peaks. In London, Brent crude was down 11 cents at $50.55 a barrel after crossing the $50 line for the first time on Monday.
Oil prices have soared 65 percent this year as the strongest demand growth in over two decades caught major producers by surprise, leaving a tightly stretched global supply system little leeway to deal with unexpected outages.
Despite relative stability in Iraq, which had rattled markets over the summer, production impediments continued to haunt the market, with US Gulf oilfields still reeling from last month's hurricane and Nigeria and Norway grappling with labour disputes.
Oil traders will now scrutinise the next batch of weekly US inventory data to see whether heating oil supplies narrow their 6 percent deficit versus last year, despite these supply problems.
The data are due out on Thursday. Distillate stockpiles were expected to fall an average 1.0 million barrels, a Reuters poll of seven analysts showed, with demand improving as autumn weather hits the US Northeast, the biggest regional consumer of heating oil.
"The fear is that there will not be enough heating oil and we are already seeing colder weather in the Northeast," said John Brady, a New York-based broker with ABN Amro. "If we get another fall in stocks, it will put further strain on prices."
Winter fuel is in short supply around the globe, with European distillate stocks 3.4 percent below last year and kerosene supplies in Japan down 20 percent from 2003. The forecast for US inventories also called for a rise of 1.3 million barrels in crude stocks for the week ended October 8, the third week of gains.
Tanks were 4.4 percent below 2003 in last week's Energy Information Administration figures.
The usual pre-winter stock-build has been thwarted by the effects of Hurricane Ivan, with around 475,000-bpd of US Gulf production still out of commission a month after the storm hit.
Two-thirds of that is expected to be shut in past the end of this month, the Minerals Management Service said last week.
Another 25,000 bpd of production is expected to be cut in Norway as a rig worker strike there widens on Tuesday, forcing the world's third-largest exporter to shut in a total 55,000 bpd.
Opec member Nigeria, which pumps around 3 percent of the world's oil, has managed to keep exports steady despite a series of threats this month, including the on-going general strike over fuel prices that is due to continue until on Friday.
The strike brought most Nigerian cities to a standstill on Monday and closed many industries, but has not hurt oil exports. Other financial markets are increasingly taking their queues from oil prices, which threaten to put a damper on economic growth and add a tax-like burden to companies and consumers.
In Japan, the world's third-biggest energy user, the main Nikkei stock market index fell more than one percent on Tuesday due to oil's continued strength, traders said.
Finance Minister Sadakazu Tanigaki said Japan's economy had grown more resilient to higher prices but that other countries might not be able to deal with rising costs as effectively.