Oil prices rallied to a record high above $55 a barrel on Friday on rising fears of a winter fuel supply crunch and robust economic growth in China, the world's number two user.

U.S. light crude jumped 98 cents to a new high of $55.45 a barrel. Prices have hit a succession of record highs over $50 for the past three weeks.Brent crude oil rose 83 cents to notch up a fresh record of $51.55 a barrel.

"All the demand signals are bullish," said Deborah White, senior economist at SG Commodities. "And now we're in winter mode, so stocks have nowhere to go but down."

U.S. distillate consumption is running four percent above last year's level as solid U.S. economic growth drives diesel demand."High diesel prices in the U.S. have not affected demand at all," White said.U.S. government data on Wednesday showed a deepening yearly deficit of heating oil inventories.

U.S. supplies of heating oil fell last week to stand 12 percent below this time in 2003, a gap that traders fear refiners will not be able to close if the heavy consuming Northeast is hit with an early or severe winter.

Federal weather forecasters said on Thursday they were still unable to predict whether the U.S. Northeast or Midwest would have a cold, warm or normal winter, with equal chances of each.

The normal autumn stockbuild has been hampered by the damage that last month's Hurricane Ivan caused in the oil-producing Gulf of Mexico, where more than 400,000 barrels per day (bpd) of U.S. production remains shut in.Heating oil futures hit $1.6030 a gallon, also a new record high.

(From Reuters, October 22, 2004)

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