US light crude traded 37 cents higher at $54.84 a barrel in out of hours trading, extending a late Thursday recovery to come within 50 cents of Monday's all-time peak of $55.33. Prices have hit a succession of record highs over $50 for the past three weeks.

Brent crude oil was up 41 cents to $51.13.

A wave of profit-taking by big-money funds trimmed gains at the start of this week, but prices quickly resumed their upward march after US government data on Wednesday showed a deepening yearly deficit of heating oil inventories.

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

"If we start to see quite a cold winter in the northern hemisphere, and particularly in the US, that will drive prices in the short-term," said industry analyst Daniel Hynes of ANZ Bank in Melbourne.

Federal weather forecasters said on Thursday they were still unable to predict whether the US 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 caused by last month's Hurricane Ivan in the oil-producing Gulf of Mexico, where more than 400,000 barrels per day (bpd) of US production remains shut in, a government agency said on Thursday.

Heating oil futures were trading at $1.5820 a gallon, just 10 points away from Thursday's all-time high.

Supplies are more than 10 percent below 2003 levels in Japan, the world's third-biggest user, although forecasters say normal winter temperatures should help avert major shortages there.