Oil prices rose above $60 today to their highest level in more than two weeks as refinery fires in the US revived fears of tight supplies.
US light sweet crude for September delivery was up 45 cents to $60.39 a barrel in Asian trade, off an earlier high of $60.42 triggered by news of a fire at BP's giant Texas City refinery, the country's third-largest.
Prices were just 2.7 per cent below record-highs of $62.10. London Brent crude was up 50 cents to $59.26 a barrel.
BP said the fire at a 60,000 barrel-per-day (bpd) residual hydrotreating unit had been brought under control. Though the unit was forced down, the fire was unlikely to disrupt production elsewhere at the plant. Yet it underscored the market's sensitivity to any outages.
"People are looking at the fear of disruption in gasoline supplies," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures.
US inventories of distillates such as heating oil and diesel rose 3.1 million barrels last week, the 10th gain in a row.
But gasoline stocks fell more sharply than expected, raising questions about whether refiners could meet peak summer driving demand at the same time as stocking up on winter fuels. US gasoline demand in the last four weeks has averaged 2.4 per cent higher than a year ago and distillates demand is running strong at 3.6 per cent over last year, US data showed.
A fire at Murphy Oil's 110,000-bpd refinery in Louisiana earlier yesterday forced the company to shut an 18,000-bpd kerosene hydrotreater, but its spokesman said runs should not be affected.
Crude oil stockpiles remain in the upper part of their seasonal range, but an active start to the hurricane season has focused attention on the vulnerability of Gulf of Mexico supplies, which account for a quarter of US production.
Seven named storms this year, including two hurricanes, have so far shut in some 6 million barrels of US production.