Brent crude hit an all-time high and U.S. oil surged more than $1 towards $89 on Thursday, after a slide in U.S. oil stocks renewed fears of an energy crunch during the northern hemisphere's winter heating season.

London Brent was up $1.59 at $85.96 a barrel at 5:07 a.m. EDT, having hit a record $86.28. U.S. crude was up $1.62 at $88.72 after a brief test of $89. It is back within striking distance of the $90.07 peak it reached last Friday.

News crude stocks in the world's top oil consumer fell 5.3 million barrels last week, instead of an expected increase of 800,000 barrels, buoyed U.S. oil on Wednesday.

Oil prices are up 45 percent this year and have more than quadrupled since the start of 2002.

Supply concerns and a shift of investor money into energy and commodities from other asset classes have boosted the market. Assaults by Turkish troops on Kurdish separatists in northern Iraq have added to tension in the oil-rich Middle East.

Gains have been limited only by concerns a U.S. housing slump could draw the economy into recession and limit demand.

That stocks fell was a huge surprise for us. Stocks are not adequate to supply all parts of the U.S. and Europe ahead of the winter season, said Yusuke Seta at Fimat Japan Inc, adding that Brent crude had also risen on the back of the U.S. data.

Now we're again looking for a rise in U.S. futures.

U.S. Energy Secretary Sam Bodman called on OPEC and other world oil producers to boost production.

OPEC members, who have already agreed to increase production by 500,000 barrels per day from November 1, will meet informally in Saudi Arabia next month. A senior OPEC delegate said another OPEC output hike may be needed.

(reporting by Annika Breidthardt)

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