Oil prices hit a fifth consecutive record high yesterday, topping $66 a barrel as robust US economic growth keeps refiners straining to meet demand and friction over Iran's nuclear programme jangles nerves.
US light sweet crude for September delivery charged to an all-time high of $66.13 a barrel, up 33 cents in early European trade.
London Brent crude also set another record at $65.88.
"Demand is outstripping supply and this is the bullet point of the problem. The US refinery snags are adding fuel to the flames. Certainly, in the long term, prices will head higher," said John Brady, energy broker at ABN AMRO in New York.
US gasoline supplies have been threatened by a series of refinery troubles, the latest being the shutdown of several units for inspections at BP's giant 460,000 barrel-per-day (bpd) refinery in Texas City, the third largest in the United States.
ConocoPhillips was also forced to shut some units at a 306,000-bpd refinery in Illinois due to a power loss.
The string of shutdowns have compounded worries raised by a steady decline in gasoline stockpiles, which are now nearly four per cent lower than a year ago with several weeks of peak summer demand still to go, according to US government data.
Record-high pump prices appear to have had little impact on demand, which is up an average 1.4 per cent over the last four weeks, the data showed, helping send US September gasoline contract to a record-high $1.9630 a gallon yesterday.
The world's largest economy continued to hold up against soaring oil prices. Latest economic data showed US retail sales jumped 1.8 per cent last month, with the biggest gain in auto sales due to buyer incentives.
Further support came from the Paris-based International Energy Agency, which cut its estimate of non-Opec supply growth.
Non-Opec nations are failing to deliver as much oil as expected this year, leaving an already stretched Opec to fill the supply void, it said in a report on Thursday. The spat over Iranian nuclear programme also underpinned prices as dealers feared the potential impact on supplies from Opec's second-biggest producer if the United Nations Security Council were to impose sanctions.
The European Union will push for Iran to be referred to the Security Council for punitive action if Tehran fails to comply with a resolution from the board of governors of the International Atomic Energy Agency demanding that it suspend all nuclear activities, EU diplomats said.