NEW YORK (CNN/Money) - Oil prices jumped more than $2 on Friday to close above $48 a barrel on renewed concern over tight supplies of distillate fuels in all main consuming centers ahead of the Northern Hemisphere winter.
Light crude for December delivery rose $2.22, or 4.8 percent, to close at $48.44 a barrel on the New York Mercantile Exchange. In London, Brent crude gained $2.13 to $44.89.
Friday's jump renewed a rally that has added 48 percent to prices so far this year as rising world fuel demand strains supplies of refined products such as gasoline, diesel fuel and heating oil.
Dealers are concerned about heating oil inventories, which are significantly below last year's levels in the top markets of the United States, Germany and Japan. U.S. supplies are 16 percent less than year-ago figures.
U.S. heating oil futures jumped 5.26 cents a gallon Friday to $1.4826, bringing it up 12 percent since Tuesday. London IPE gas oil, used as the European basis to price distillates such as heating oil, added more than 6 percent to settle at $449.75 a ton.
Heating oil and gas oil's big gains have dragged up refining profits and spurred physical oil buying on both sides of the Atlantic, helping staunch a three-and-a-half week slide on crude futures.
News that China, the world's second-biggest energy user, has boosted diesel imports to their highest levels since early 1999 also fueled the gains.
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"It's because we've had such an explosive rise in heating oil prices -- I don't think we've ever seen such a dramatic increase in the spread between heating oil and crude," said Kevin Norrish of Barclays Capital.
The rally comes after prices plunged nearly 17 percent from record highs in late October as signs of building crude supplies and slowing demand growth drove investors out of energy and into financial or equity markets.
Winter weather worries
An early or severe winter could cause a price spike in household heating demand. Continued mild weather, however, would give refiners more time to replenish stocks, providing a cushion against future cold snaps.
The U.S. National Oceanic and Atmospheric Administration said Thursday in a revised forecast that winter would be likely to bring warmer-than-normal conditions in the West and colder temperatures in the East, including the heavy-consuming Northeast.
Oversupply on crude markets has also focused attention on the OPEC producers cartel, which has been pumping near flat out at near 30 million barrels per day since the late summer.
Venezuelan Energy Minister Rafael Ramirez said late on Thursday his country would support a cut in oil production by oil cartel OPEC when the producers' group next meets on Dec. 10.
The minister said OPEC member Iran had already made a proposal to cut production at the upcoming meeting. Some producing nations are concerned that a potential build-up in crude stocks over the next few months could depress oil prices.
On Thursday the OPEC cartel revised down its expectations of oil demand growth for next year and projected a rare big winter stockbuild if the group keeps producing at current levels.
Problems with Iraqi oil exports continue to keep the crude market on edge, with sabotage stopping flows from the north to the Turkish port of Ceyhan since last week and foul weather halting shipments from the southern port of Basra since Wednesday.
-- Reuters contributed to the story
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