Oil struck a two-year peak near 99 dollars per barrel here on Wednesday, boosted by plunging American crude reserves, and as the key Trans-Alaskan pipeline remained shut following a leak.
The market was also boosted following news of falling crude oil stockpiles in the United States -- the world's biggest oil consuming nation.
Brent North Sea crude for delivery in February jumped 86 cents to reach 98.47 dollars a barrel, which was the highest level since October 1, 2008.
New York's main contract, light sweet crude for February, rallied 84 cents to 91.95 dollars per barrel.
Prices pushed higher after the U.S. government's Department of Energy revealed that American crude stockpiles sank by 2.2 million barrels last week. That beat market expectations and suggested stronger-than-expected demand.
"There are quite a few good reasons that could explain and verify the current high oil prices," said Myrto Sokou, an analyst for the Sucden brokerage in London.
As well as the Alaskan pipeline shutdown, "forecasts about heavy winter conditions in the U.S. northeast as well as strong equity markets could provide further support to crude... while it might be fairly soon that we can see the oil prices back to the $100 level," she added.
The 800-mile (1,300-kilometer) pipeline delivers between 630,000 and 650,000 barrels a day of crude produced in the Arctic region to Valdez port in southern Alaska, from where it is delivered to the U.S. mainland. The link carries about 12 percent of total US production.
"There is some uncertainty surrounding the pipeline leak in Alaska," said analyst Matt Smith of Summit Energy.
"There has not been any clarity about when it would be resolved."
Smith said that U.S. oil supplies were generally strong, but that the lack of information on how long the pipeline will remain closed nevertheless impacted prices.
"Until we have more clarity around that, there is going to be a premium in prices," he added.
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