Oil extends 3.5 pct surge after deep US crude draw

SINGAPORE, Oct 26 (Reuters) Oil prices extended a sharp rally to within reach of a barrel on Thursday, staying at their highest in nearly a month after a steep fall in U.S.

crude oil inventories and more signs that OPEC is committed to cuts.

U.S light crude was up 21 cents at .61 a barrel by 0627 GMT, rising for a third day after a 3.5 percent surge the day before, the market's sharpest one-day gain in seven months.

London Brent crude was up 13 cents at .18 a barrel.

Prices spiked to their highest since Oct. 2 on Wednesday after U.S. data showed that crude stocks fell 3.3 million barrels last week, contrary to forecasts of a rise.

''The unexpected stock figures from the United States really helped to put the colour back into oil,'' said Gerard Burg, a commodities analyst at National Australia Bank.

The drop in crude inventories in the world's largest oil consumer was due to the closure of the Louisiana Offshore Oil Port, the country's largest oil import facility, for three days due to bad weather last week.

Distillate stocks were also lower than forecast, falling 1.4 million barrels, the data showed. S] More evidence of OPEC's resolve to make good its pledge to cut 1.2 million barrels per day of production has also helped prices recover from a 2006 low of .55 a barrel last week, when traders questioned some OPEC members' willingness to cut.

An Iranian official said on Wednesday that it had informed customers it would be cutting November supplies by 176,000 bpd, while a Nigerian official said the country would extend the 5 percent curbs it imposed voluntarily this month into November.

Customers of Saudi and Abu Dhabi crude said earlier this week they were notified of cuts.

''OPEC is showing some backbone,'' said Tony Nunan, a risk manager with Japan's Mitsubishi Corp. ''It looks like we have now confirmed the medium-term bottom (for prices).'' Weather concerns have also helped the recovery, with an early chill in the Northeast set to keep oil demand strong over the next five days, according to forecaster Meteorlogix.

Wednesday's U.S. data also showed strong demand against a year ago, when demand was hit by a spike in fuel prices after Gulf hurricanes disrupted refinery production.

Total product demand was up 4.1 percent over the past four weeks against a year ago, the data showed.

REUTERS LL DS1345