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Last Updated: Friday, 29 July 2005, 20:14 GMT 21:14 UK
Refinery fires drive up oil price
A man filling up his car
Dennis sparked volatility in the fuel markets
Oil prices have soared back above $61 a barrel after fires at two US oil refineries and a North Sea rig.

US light sweet crude closed at $60.57, up 1% having hit $61.05 earlier in the day. London's Brent crude ended the day at $59.52.

The fresh rise came as the US Senate passed President George W Bush's energy bill, giving $14.5bn in tax breaks and subsidies to US energy firms.

The bill is unlikely to have any short term effect on US energy costs.

The White House insists that it will, however, make a difference in years to come by opening up drilling for oil in Alaska, subsidising new nuclear power plants, and doubling production of corn-based ethanol used as a petrol additive.

Refineries have already begun showing clear signs of exhaustion
Frederic Lasserre, SG Commodities

President Bush has been trying to get an energy bill through Congress for several years.

But critics, including most Democrats, say it fails to tackle energy consumption, leaving the US in thrall to overseas producers.

Among their main complaints is the lack of any limits on gas-guzzling vehicles.

They also say that the $3.1bn earmarked for tax credits on renewable energy does not go far enough.

Shutdowns

Meanwhile, the breakdowns in two US refineries thanks to fires were taken in some quarters as evidence that energy supply lines in the US were overstretched by current high demand.

"The marathon that refiners have been running for the past year and a half is far from finished, and their plants have already begun showing clear signs of exhaustion," wrote Frederic Lasserre of SG Commodities in a note to clients.

Texas City was the site of two shutdowns which helped push prices higher.

BP's plant - the third biggest in the US - shut a desulphurisation unit after a fire, just four months after 15 workers died in an explosion.

At the same time, Marathon shut down part of its refinery following an oil leak.





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