Oil prices held firm above $63 a barrel today, kept near their record high by the threat of attacks in Saudi Arabia, tensions over Iran's nuclear programme and refinery outages in the United States.
US crude futures rose 13 cents to $63.20 a barrel early today, having succumbed to late-session profit-taking yesterday after prices hit an all-time high of $64.27 early on.
London Brent crude was up 9 cents to $62.07 a barrel.
Prices rallied this week after the US said it would close its missions in Saudi Arabia, the world's top exporter, for two days, and as Britain warned of advanced plans for attacks in the kingdom. No attacks have been reported.
Crude oil producers and refiners have struggled to keep up with strong demand growth over the past two years, reducing the cushion of spare capacity needed to make up for any sudden outages, such as a disruption in exports from the Middle East.
Supply security fears have also reared their head in Iran, OPEC's second-biggest member, which is at odds with Western governments over its nuclear programme.
Iran has resumed work at a uranium conversion plant, defying EU warnings that it could be referred to the UN Security Council for possible sanctions, but newly elected President Mahmoud Ahmadinejad struck a conciliatory tone yesterday.
"I have new initiatives and proposals which I will present after my government takes office. We are ready for talks and negotiations have never been interrupted by us," Ahmadinejad was reported to have said.
Dealers took little solace in OPEC's reiteration of its commitment to "reasonable prices", as both traders and the cartel say its a shortage of refining capacity, not crude oil, that has pushed prices up more than 45 per cent this year.
Capacity has been further tested by nearly a dozen unplanned refinery outages in the past few weeks as plants show the strain of keeping up with oil demand that shows little sign of being deterred by record-high prices.