NEW YORK (CNN/Money) - Oil prices closed near the $55-a-barrel mark Wednesday as a fresh fall in U.S. heating oil stocks stoked worries over winter supplies.

Light crude for November contract, which expires at the end of trading Wednesday, traded as high as $55.10 a barrel before settling at $54.92, up $1.63 on the session. The December light crude contract closed $1.77 higher at $54.41.

In London, Brent crude settled $1.75 higher at $50.52 a barrel.

Oil prices finished Tuesday's session lower but took a different direction Wednesday after the U.S. government reported that distillate stocks, including heating oil and diesel fuel, fell 1.9 million barrels last week to 119.0 million barrels. Distillate stocks are now nearly 10 percent below last year.

"We're not seeing enough pickup in production or imports. This should be enough to support the whole energy complex through the balance of the week," Jim Ritterbusch, analyst with Ritterbusch and Associates, told Reuters.

Stocks normally grow at this time of year, but Hurricane Ivan in September disrupted crude production and oil shipments in the Gulf of Mexico and hampered refining operations on the Gulf Coast.

About 25 percent, or almost 430,000 barrels per day (bpd), of oil production in the Gulf of Mexico remains shut, the U.S. Minerals Management Service said.

Heating oil supplies are also running low in other key demand centers, such as Germany and Japan. Japan is the world's third-biggest oil consumer, and its kerosene inventories are roughly 13 percent below a year ago.

Oil shipments into and around Japan were disrupted on Wednesday by a typhoon, with six out of eight refiners reporting the suspension of shipping operations in southern, western and central areas of the country.

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Prices slipped back briefly early this week on evidence that this year's $20 surge may be starting to bite into economic growth and could dampen demand for oil next year.

European Union employers' organization UNICE said on Wednesday that oil prices pose a major risk to the EU economy, even though it is still expected to expand more quickly in 2004 than previously forecast.

"Energy price developments constitute the most immediate risk to our outlook," UNICE said in a report based on soundings of its national member federations.

It said most of its panelists expected a barrel of crude oil to cost between $35 and $40 by February 2005. This is close to the threshold of $46, at which point the European economy would be significantly hurt, employers warn.  

-- Reuters contributed to the story