Warnings of a possible terrorist attack in Saudi Arabia and worries over Iran's resumption of its nuclear programme helped push crude prices to nominal records, with analysts saying the price could soon breach $65 a barrel.
Crude oil futures in New York yesterday approached $64 a barrel and US gasoline futures also reached new highs as an already-tight oil market reacted to warnings from the US, Britain and Australia of possible attacks in Saudi Arabia, the world's biggest oil producer.
Britain talked of "credible reports" that terrorists were in the "final stages of planning attacks" in the kingdom, a warning that was echoed by the Australian government and came as the US closed its missions in Saudi Arabia, also citing a terrorist threat.
The futures market has been driven higher by one of the worst sequences of refinery outages in years.
Yesterday, Valero and ConocoPhillips both confirmed that they had had problems at refineries over the weekend.
Prices were also lifted by Iran's resumption of nuclear activities at a uranium conversion plant in Isfahan - a move that brings Tehran closer to the threat of United Nations sanctions.
The International Atomic Energy Agency will hold an emergency meeting of its board of governors today to discuss Iran's decision.
Oil traders are concerned that Iran's resumption of its nuclear programme could prompt the European Union to back US calls for sanctions against the second-biggest oil producer in the Organisation of the Petroleum Exporting Countries.
US oil futures hit a high of $63.95 a barrel.
By midday in New York, the September Nymex contract was trading up $1.39 at $63.70 a barrel.
Brent crude oil, the European benchmark, rose to a high of $62.70 a barrel.
The latest refining outages heightened concerns that the system has been pushed too far for too long, especially in the US, and cannot keep pace with growing demand for oil products.
A sequence of accidents and lack of spare capacity mean refineries could face difficulties meeting oil demand this winter.
The International Energy Agency, the industrial countries' energy watchdog, has forecast that oil consumption will reach 85.9m barrels a day in the fourth quarter, up from 83.7m barrels a day yesterday.
"The profusion of recent snags in the US refining system suggests that the system is being pushed beyond its sustainable limits and that interruptions are more likely," said Kevin Norrish, of Barclays Capital in London.
Global refinery utilisation rates have this year exceeded 95 per cent, up from 75 per cent two decades ago.
ExxonMobil, BP and Shell have also suffered outages recently in US and European refineries.
