LONDON - World oil prices rose towards fresh records on Friday after twice hitting an all-time high of 60 dollars per barrel in New York, propelled by supply fears in the face of massive Chinese and US demand.
New York's main contract, light sweet crude for delivery in August, advanced 48 cents to 59.90 dollars a barrel in electronic deals on Friday from its close of 59.42.
The contract hit 60 dollars per barrel exactly for the first time during New York trading Thursday, as speculators seized on supply concerns ahead of the northern hemisphere winter to test the key psychological barrier.
The historic level -- the highest level since it was first traded in 1983 -- was touched again in overnight electronic trading and broke Tuesday's record 59.70 dollars.
In London Friday, the price of Brent North Sea crude oil for delivery in August gained 34 cents to 58.30 dollars per barrel, after earlier reaching 58.51 dollars, not far off Monday's high of 58.58 dollars.
Friday's trading would be crucial to determine whether prices can climb above and remain over 60 dollars per barrel, according to Daniel Hynes, a commodities analyst with the ANZ Bank in Melbourne, Australia.
"It will be important to see if it can establish itself above that level. It's a pretty key psychological mark," Hynes said.
"Trading will be especially important in the US leading into the weekend. It will certainly be a key 24 hours."
Prices are hitting record peaks as speculators worry that refineries will struggle to turn enough crude oil into heating fuel to meet fourth-quarter demand, dealers said. US refineries are currently operating at around 95 percent of capacity.
"People are looking forward to the fourth quarter and thinking that supply really will be struggling to keep up with demand at that point," said Seymour Pierce analyst Richard Slape.
"I can't see any reason why prices should go back down substantially in the short term."
"Chart analysts think that if prices break 62 dollars, they could go all the way up to 80 dollars" should any disruptions to refineries occur, he added.
The market has largely ignored Wednesday's reassuring US stocks report and the end of a threatened strike by Norweigan oil workers this week to focus on worries that global demand could outpace supply.
Underlining its voracious appetite for energy, China was to start filling its first strategic petroleum reserve this year as part of plans to ensure it has a supply of emergency oil, the Chinese state press reported on Friday.
The 16-tank facility in Zhenhai city in the eastern province of Zhejiang is meant to provide a cushion for China against possible interruptions of foreign supplies, the China Daily said on its website.
Similar to the US strategic reserve, Beijing aims to stockpile up to 100 million barrels of petroleum, equivalent to almost a month's national consumption.
06/24/2005 11:24 GMT