Crude oil prices soared to record highs Friday as hot world demand strained producers, sharpening an array of threats from a possible strike in Venezuela to Iraqi pipeline sabotage.
New York's benchmark light sweet crude for delivery in September leapt US$1.08 to a record high settlement of US$46.58 a barrel. It spiked at an all-time high of US$46.65.
London's Brent North Sea crude oil for September soared US$1.59 dollars to a record finish of US$43.88 a barrel after hitting an all-time high of US$43.92.
China, the second-biggest oil consumer after the US, said imports of crude oil in the first seven months rose by nearly 40 percent from a year ago as its energy-hungry economy expanded at close to double-digit levels.
Saudi Arabia has said it has immediate spare capacity of up 1.3 million barrels per day but analysts are sceptical.
The Organization of Petroleum Exporting Countries is widely believed to be pumping at near capacity.
Meanwhile, the market faced a slew of risks: a referendum in Venezuela that could lead to a strike, Iraqi bloodshed that could spark pipeline attacks, and the threat of terrorist attacks at the Athens Olympics.
Many traders were buying oil as a precaution ahead of a recall referendum on Sunday directed at Venezuelan President Hugo Chavez. The vote has raised fears of strike action in the oil industry.
"It looks like it is going to be a tight election," said Fimat USA market analyst John Kilduff.
"You have to believe the losing side is going to allege fraud and that the situation will deteriorate," he said. "There is a real possibility oil production will be affected or reduced as result."
The fifth-largest crude exporter, Venezuela produces between 2.5 million and 2.6 million barrels per day, according to analysts, and about 15 percent of the oil imported by the US.
Russian oil titan Yukos -- facing a bankruptcy threat because of a massive tax bill -- further undermined confidence in oil supplies.
But the outlook improved a little as a Western bank was asked to mediate in the Yukos oil saga.
The decision followed heavy pressure from US officials on President Vladimir Putin's administration to come clean about what it planned to do with Yukos amid fears of disruption in oil exports from the world's number two producing nation.
Yukos produces about 1.7 million barrels of oil per day, nearly as much as the maximum output of Iraq.
Reports of a fire at a BP refinery in Whiting, Indiana, which was later extinguished, supported prices of gasoline and the rest of the market, traders said.
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