* API2 2017 at highest level since March 2015
* Newcastle November contract at highest since 2014 (Adds more comment from traders)
By Nina Chestney
LONDON, Sept 28 (Reuters) - Benchmark coal futures rose to an 18-month high of $62.40 a tonne on Wednesday, advancing along with oil and other European energy markets and also in response to higher demand.
The API2 2017 contract TRAPI2Yc1 gained 2.46 percent to $62.40 a tonne by 1324 GMT on the globalCOAL platform, its highest since the beginning of March 2015.
"Oil is up and the dollar has softened a bit against the euro but we are also nearing October when the traditional heating season starts in Europe at least - some buying might be due to that," a coal trader said.
Other traders said demand for power was also on the rise in China and the Asia Pacific region.
Oil prices rose on Wednesday, after sharp losses in the previous session, as the focus shifts to a potential output-curbing deal from OPEC later this year and a surprise drawdown in U.S. crude stocks. O/R
UK and Dutch gas, European power and EU carbon prices were also rallying.
The dollar was also slightly weaker against the euro, after Fed Vice Chairman Stanley Fischer said on Tuesday the Federal Reserve should avoid raising interest rates too much.
Commodity brokerage Marex Spectron said in a note to clients that coal supply in both the Atlantic and Pacific had declined, supporting prices.
The market also showed signs of being low on supply as the heating season is due to begin in the northern hemisphere.
"The import arbitrage spread into China remains widely open, which is keeping pressure on some utilities and traders there to dip into the seaborne market," said Georgi Slavov, global head of energy, iron ore and shipping research at Marex Spectron.
Coal prices are also getting support from currency markets and the buying power of some end-users is gradually improving, Slavov said.
In the physical market, cargo prices for Australian thermal coal from its Newcastle terminal for November GCLNWCPFBMc3 rose by $1.15 to $77.50 a tonne on globalCOAL, their highest level since 2014.
On Tuesday, sources told Reuters that China had ordered major coal mines to raise thermal coal output by another 500,000 tonnes per day, in the latest concerted effort by the government to boost supplies to its electric utilities ahead of the winter. for South Africa's Richards Bay coal in November GCLRCBPFBMc3 were $0.40 higher at $71.00 a tonne. (Editing by William Hardy and Jane Merriman)