Oil prices surged more than $1 on Wednesday as worries over tight heating fuel supplies in the U.S. and Europe this winter countered a previous bout of profit-taking by big-money funds. U.S. light, sweet crude was up $1.13 at $53.64 a barrel, erasing losses from a recent sell-off and bringing prices less than $1 below Tuesday's record peak of $54.45. London Brent gained 45 cents to $50.05 a barrel. Dealers said a deficit in heating oil supplies in the U.S. Northeast, the world's largest heating oil market, and tight inventories in Europe and Asia were rekindling supply fears ahead of the Northern Hemisphere winter. "There's some uncertainty about how this winter is going to shape up and further declines in heating oil stocks will certainly scare this market," said Jim Ritterbusch of Ritterbusch and Associates. The supply worries countered a big drop in crude prices Tuesday, when funds sold down the record futures high on forecasts of slowing demand growth, in line with losses in other commodities markets. U.S. stockpiles of heating oil were 6 percent below 2003 levels last week and have been slow to build due in part to last month's Hurricane Ivan, which damaged oil operations in the Gulf of Mexico. --More 2300 Local Time 2000 GMT
