Crude oil traded near a record $104.95 a barrel in New York after OPEC yesterday refrained from raising production and Colombian rebels bombed an oil pipeline in the country.

The Organization of Petroleum Exporting Countries agreed to keep output unchanged at a meeting in Vienna. Colombian rebels attacked an oil pipeline yesterday, escalating a cross-border dispute with Ecuador. U.S. inventories fell for the first time in eight weeks, the Energy Department said.

``The emerging crisis in Latin America has certainly raised political tensions among oil producers, and that's helped to set a high floor for prices,'' said Victor Shum, a senior principal at Purvin & Gertz Inc. in Singapore. ``OPEC's decision to keep output unchanged is supportive of prices, and the draw in U.S. crude inventories was totally unexpected.''

Crude oil for April delivery was at $104.26 a barrel, down 26 cents, in after hours electronic trading on the New York Mercantile Exchange at 4:02 p.m. in Singapore.

Oil rose $5 to settle at $104.52 yesterday, a record close and the biggest one-day increase since Jan. 30, 2007. Futures earlier touched the highest since trading began in 1983.

Yesterday, Colombian rebels bombed the Transandino Pipeline near the country's border with Ecuador, said an official at the Ministry of Mining and Energy who asked not to be identified. The extent of the damage won't be known until the military has secured the area, which is expected today, she said. The pipeline may be out of service for three days.

Transandino Pipeline

Brent crude for April settlement traded at $101.39 a barrel, down 25 cents, on London's ICE Futures Europe exchange at 4:02 p.m. in Singapore. Yesterday, the contract gained $4.12 to $101.64 a barrel, a record close. Futures reached $102.29 a barrel on March 3, the highest-ever intraday price.

The Transandino carries oil from fields in Colombia and Ecuador to an export facility in Tumaco on Colombia's Pacific coast.

The rebel attack on the pipeline may be in retaliation for the killing of Raul Reyes, the No. 2 commander of the Revolutionary Armed Forces of Colombia, in a weekend raid by the Colombian military into Ecuador.

That attack has raised tension in the region, with Ecuador, the smallest OPEC producer, demanding an apology and Venezuelan President Hugo Chavez ordering tanks to move to the Colombian border, saying the March 1 strike risks a war. Venezuela is the fourth-largest supplier of crude to the U.S.

U.S. Stockpiles

In the U.S., crude-oil supplies fell 3.06 million barrels to 305.4 million in the week ended Feb. 29, according to the Energy Department. A 2.4 million-barrel gain was forecast, according to the median of responses by 15 analysts surveyed by Bloomberg.

Crude oil processing at U.S. refineries rose to the highest in six weeks, climbing 1.2 percentage points to 85.9 percent for the week ended Feb. 29, the Energy Department reported.

``The commercial crude inventory in the U.S. is slightly above the five-year historical average, so it's not like the U.S. is running out of oil,'' said Purvin & Gertz's Shum. ``Gasoline inventories are continuing to build and are above the five-year historical average. And the market chose to focus on the drawdown in crude stockpiles.''

Gasoline inventories rose 1.66 million barrels to 234.3 million barrels in the week ended Feb. 29, Energy Department data showed. That's more than double the 600,000 barrel-gain forecasted by analysts in a Bloomberg survey prior to the report's release.

`Renewed Tension'

U.S. refiners typically boost crude-oil processing toward the end of the second quarter to meet summer demand.

``The current market is trading news, not fundamentals,'' said Makoto Takeda, an energy analyst at Bansei Securities Co. in Tokyo. ``With the ongoing dollar weakness and OPEC's decision effectively keeping a lid on oil supply, the renewed tension between Venezuela and Colombia may trigger a further gain in oil prices.''

Supplies of distillate fuels, a category that includes heating oil and diesel, fell 2.33 million barrels to 117.6 million barrels last week, the report showed.

Heating oil for April delivery gained 5.4 percent to $2.9431 a gallon, a record close.