November 10, 2006	Friday	Shawwal 17, 1427

LONDON, Nov 9: World oil prices surged past $61 per barrel on Thursday, their highest level in two weeks following the previous day's heavier-than-expected fall in US heating fuel reserves.

New York's main contract, light sweet crude for delivery in December, jumped $1.32 to reach $61.15 per barrel in pit trading. It earlier touched $61.25 which was last seen on October 26.

In London, Brent North Sea crude for December delivery leapt by $1.64 to $61.23 per barrel in electronic deals, after earlier hitting $61.43, also last reached on October 26.

“Crude oil futures were firmer on Thursday, edging above $60 a barrel in London and New York, extending strong gains from the previous session after US distillate stocks declined more than expected,” said Michael Davies, an analyst at the Sucden brokerage in London.

The US Department of Energy had said on Wednesday that levels of distillates, including heating oil and diesel, fell 2.7 million barrels to 138.6 million in the week to November 3. That was far larger than the expected fall of 800,000 barrels.

Distillates are currently in focus ahead of the northern hemisphere winter, during which demand for heating fuel hits a peak.

The DoE added that inventories of crude oil rose 400,000 barrels to 334.7 million. Analysts had expected a rise of 750,000 barrels.

Gasoline reserves fell 600,000 barrels to 204 million barrels, against forecasts for little change.

Crude futures had gained about one dollar in trading on Wednesday following publication of the DoE energy report.

The market was also watching the dramatic changes in the US political landscape after Democrats gained power in the House of Representatives during mid-term elections on Tuesday.

US media reported on Wednesday that Republicans had also lost control of the Senate, a powerful setback for President George W. Bush.

“Since the Democrats have gained control, it has created uncertainty, specifically with energy policies, and uncertainty always leads to price increases,” said Victor Shum, senior principal with Purvin and Gertz in Singapore.—AFP