Oil surges to record high as funds march in

By Chikafumi Hodo

TOKYO (Reuters) - Oil rose to a fresh record near $125 (64 pounds) a barrel on Friday, as a strong performance over the last week and a surge in heating oil futures convinced investment funds to push prices higher.

Funds were keen to shift their money into the oil market after seeing U.S. crude rise about 13 percent since the start of the month.

U.S. crude for June delivery CLc1 rose as far as $124.70, surpassing the previous record of $124.61 hit on Thursday.

By 0525 GMT, the June crude contract was $124.55 a barrel on the Globex electronic trading platform, up 86 cents, or 0.7 percent.

London Brent crude LCOc1 rose 85 cents to $123.69 per barrel.

"Funds are pouring into the crude market as prices have been performing extremely well," said Tatsuo Kageyama, analyst at Kanetsu Asset Management in Tokyo.

"Lingering geopolitical fears and high heating oil prices are helping the market, but the speed of the rise is too fast."

Gains in U.S. crude picked up momentum after distillate stocks in the United States, including heating oil, fell.