Oil prices jumped above $58 a barrel on Friday, hitting a new record high in New York on concerns that shortages in refinery capacity could mean that strong demand would not be met during the fourth quarter.
New York's main contract, light sweet crude for delivery in July, rose $1.97 cents to $58.55 a barrel on Friday evening. In London, the price of Brent North Sea crude oil for delivery in August climbed 78 cents to $57 a barrel after peaking at $57.32.
Prices have risen for three days in a row to reach the highest levels since April 4 when they struck historic levels of $58.28 in New York and $57.65 in London.
Analysts and officials have pointed out that there has been no significant investment in new refineries for about 20 years despite spiralling demand for finished petroleum products, including distillates and petrol. Distillates comprise heating fuel and diesel.
Prices began shooting higher on Wednesday after the US Department of Energy (DoE) said crude oil reserves fell 1.8 million barrels to 339 million in the week ending June 10. The data were released a few hours after OPEC's 11 members agreed to raise the cartel's production ceiling by 500,000 barrels per day on July 1, saying it might repeat the move by September.
OPEC's quota increase was largely seen as a symbolic gesture, however, because the cartel was already pumping more oil than its official ceiling of 27.5 million bpd set before Wednesday's increase.
