Oil Prices Hit Record on Supply Concerns

Crude oil prices rose to a record Sunday on concern that oil producers and refiners would have to strain to boost output to meet surging demand for fuel.

Crude oil for August delivery rose as much as 61 cents, or 1%, to $60.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Iran and other OPEC countries are pumping oil at “the highest possible level” and can’t increase production to meet rising global consumption, Iranian Central Bank Gov. Ebrahim Sheibany said Sunday.

“The rally is being demand-driven, running up against capacity constraints,” said Tobin Gorey, an economist at Commonwealth Bank of Australia in Sydney. “It won’t take many supply disruptions for things to get quite tight quite quickly.”

On Friday, oil rose 42 cents, or 0.7%, to $59.84 in New York, the highest price for a contract closest to expiration since trading began on the exchange in 1983. The contract rose 66 cents, or 1.1%, last week.

U.S. crude oil stockpiles have dropped three weeks in a row, raising concern that producers won’t keep pace with refiner needs as they make gasoline for summer travel. Demand for oil-based fuels in the last four weeks was 1.7% higher than a year earlier, the U.S. Energy Department said Wednesday.

The Organization of the Petroleum Exporting Countries, which supplies about 40% of the world’s oil, probably will ship less oil in the four weeks ending July 9, according to Oil Movements, a consulting firm that tracks tanker movements.

OPEC is to ship 24.2 million barrels a day in the four weeks ending July 9, down 60,000 barrels from the four weeks ended June 11, Britain-based Oil Movements reported Thursday.