U.S. oil closes near $97 a barrel

New York -- Oil prices surged nearly $3 to close near $97 a barrel Tuesday on fears a U.S. government report would show oil supplies fell ahead of the cold winter months.

Bombings in Afghanistan and on a Yemeni oil pipeline compounded supply concerns.

Light, sweet crude for December delivery closed up $2.72, or 2.89 percent, at $96.70 a barrel on the New York Mercantile Exchange.

It reached $97.10 earlier, a trading record high.

Many traders expect a U.S. Energy Department report Wednesday to indicate crude inventories fell about 1.6 million barrels last week, raising fears U.S. supplies will be insufficient as cold temperatures arrive.

The department's Energy Information Administration predicted Tuesday that U.S. oil consumption would rise the rest of this year and next year, despite higher prices, and that crude inventories would fall.

December natural gas fell 14 cents, or 1.8 percent, at $7.86 per 1,000 cubic feet.

Heating oil advanced 6.39 cents, or 2.51 percent, at $2.6078 a gallon.

Reformulated-gasoline blendstock for oxygen blending added 5.39 cents, or 2.26 percent, at $2.435 a gallon.

AAA said the average U.S. retail regular unleaded gasoline price was $3.024 a gallon, up 2 cents from Monday's $3.004 a gallon.

© 2007 United Press International.