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Last Updated: Thursday, 4 August 2005, 13:10 GMT 14:10 UK
Oil prices rise on supply worries
US gasoline station
Demand for gasoline in the US is intense at the moment
Oil prices have moved higher on Thursday as concerns persist that demand will outstrip supply.

New York light crude added 0.6% to $61.20 a barrel. In London, Brent crude also advanced 0.6% to $60.

On Wednesday, the cost of a barrel hit a record of $62.50 and analysts said that prices were likely to stay close to those levels until problems ease.

There have been refinery closures in the US, the threat of hurricanes and supply worries in the Middle East.

Surge ahead

US demand for petrol is expected to increase at a time when supplies from refineries are tight.

Even with US retail prices at record highs, the economy continues to surge ahead
Tom Wallin, Energy Intelligence

Four major US refineries, including the country's third largest, were closed last week because of fires or unplanned maintenance.

The death of King Fahd of Saudi Arabia and rising tensions between Iran and the US over the former's nuclear programme has also kept the market on edge.

According to US Department of Energy figures, petrol stocks fell by 4 million barrels last week, more than expected.

"Even with US retail price prices at record highs, the economy continues to surge ahead and with its gasoline consumption," said Tom Wallin, from research firm Energy Intelligence.

US refineries have been operating near maximum capacity in recent months.

There are concerns about their ability to meet demand for heating oil in the final quarter of the year with the onset of winter in the Northern Hemisphere.

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