Oil inches towards $55 milestone

Crude oil futures inched toward the $55 milestone today, a day after US officials announced a decline in their country’s inventory of heating oil, heating a market already on edge over tight supplies, high demand and unrest in key producers.

Oil for November delivery was at $54.78 early today in after-hours electronic trade in Asia – up two cents from its record closing in New York yesterday.

A fourth straight week of falls in US distillate stocks just before the Northern Hemisphere winter had pushed crude up yesterday by $1.12, or 2.1% – its eighth record high in two weeks.

Commercially available supplies of heating oil declined by 1.2 million barrels for the week ending October 8, falling to 50.0 million barrels, or 10% below year-ago levels, the US Energy Department said in its weekly petroleum supply report.

Crude futures have climbed about $10 last month alone, in large part because of the slow recovery of oil production in the Gulf of Mexico following Hurricane Ivan.