World oil prices rose to fresh four-month highs today as investment fund buying and US refinery outages extended the rally close to last year's all-time high.
US light crude was trading 60 cents up at $53.65 a barrel, posting gains of around 17 per cent in just over three weeks. London Brent crude was up 63 cents at $51.85 a barrel, within touching distance of October's record $51.94.
Oil 's rise has been driven by a fresh influx of both speculative and long-term fund money into commodities, where surging raw materials demand from China and solid growth in industrialised nations have stretched production capacity.
The dollar's sharp fall last week accelerated the inflow as rising energy markets offered a place for speculators to park their cash and OPEC producers were thought likely to pursue higher dollar-denominated prices to protect purchasing power.
Refinery problems in the massive US oil market outweighed rising inventories yesterday, propelling prices above $53 a barrel for the first time since October 27 last year.
Disruptions at Texas oil refineries included a brief outage at a gasoline unit of BP's big Texas City plant and a fire at Western Refining Co.'s refinery in El Paso.