Oil jumps almost $2, nears record

NEW YORK (CNNMoney.com) -- Oil prices jumped almost $2 a barrel Thursday, and neared a new record high, following a surprise drop in U.S. crude inventories, a strike at Chevron's operations in Nigeria and a fire at BP's Alaska oil field.

U.S. light crude for November delivery rose $1.78 to settle at $83.08 a barrel on the New York Mercantile Exchange. Oil reached $83.67 during the day in electronic trade, coming within 23 cents of the all-time trading high of $83.90 set September 20.

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In its weekly inventory report, delayed by a day due to the Monday holiday, the Energy Information Administration said crude stocks fell by 1.7 million barrels last week. Analysts were looking for a gain of 1 million barrels, according to a Dow Jones poll.

Distillates, used to make heating oil and diesel fuel, declined by 600,000 barrels, in line with estimates.

But gasoline supplies, expected to drop by 300,000 barrels, actually rose by 1.7 million barrels. And gasoline demand, which usually shows an average annual growth of about 1.5 percent, was running about 0.4 percent below last year.

"It's a pretty neutral report," said Peter Beutel, an oil analyst at the consultancy Cameron Hanover. "But a neutral report gives people the chance to focus on what they want, and the fact that the market came down on the bullish side is a pretty bullish sign."

Beutel said we could see a new record high in the next few days, especially if the dollar falls or the Nigerian strike gets worse.

Oil prices are now near their all-time trading high set last month as the dollar fell, storms threatened production in the Gulf of Mexico and fears over a subprime-induced recession subsided.

A number of events brought oil prices nearly to new records Thursday.

In Nigeria, "Employees of some of the companies providing labor work force to Chevron, and belonging to the National Union of Petroleum and Natural Gas Workers ... initiated [a] strike" at six facilities, Chevron said in a statement, adding that production was unaffected.

It was unclear how long the strike might last. Nigerian oil workers have a history of striking frequently but returning to work quickly.

Oil prices often rise when oil supplies are threatened in Nigeria, Africa's biggest oil producer and one of the top overseas suppliers to the United States.

In Alaska, BP (Charts) this week reported the fifth fire in two months in the North Slope fields it is in charge of managing.

While the latest fire was small and extinguished quickly Saturday, BP said it likely would cut production from the Prudhoe Bay field by about 30,000 barrels a day as workers conduct repairs. Vienna's PVM Oil Associates said the cutback would last for two weeks.

The Prudhoe Bay field is the largest in the United States and averaged 300,000 barrels per day over the summer. It is operated by BP, on behalf of itself and other owners, including Exxon Mobil (Charts, Fortune 500), Conoco Phillips (Charts, Fortune 500) and Chevron (Charts, Fortune 500).

The International Energy Agency's monthly oil market report kept its world oil demand growth forecasts for this year and next unchanged and expressed concern over OECD oil stocks - reserves held by the world's key industrialized countries - have fallen below a five-year average, despite rising supply.

Total OECD industry stocks fell 21 million barrels in August to 2.66 billion barrels, with most of the draw occurring in the United States. Overall, that was 70.4 million barrels lower than the same period last year, the agency said.

The IEA left its estimate of world oil demand growth for this year and the next unchanged at 1.5 percent and 2.4 percent respectively.

- from staff and wire reports