Oil prices held strong just under $41 a barrel for US crude as concerns that OPEC may not be able to meet the surge in demand fed by global economic expansion fuelled speculation that $40-plus oil could be here for some time.
Benchmark US light crude futures rose to a new peak of $40.84 a barrel from Wednesday's close of $40.77, the New York Mercantile Exchange's highest closing price in the 21 years since it launched its crude contract.
The intra-day record stands at $41.15 a barrel struck in October 1990 after Iraq's invasion of Kuwait. London Brent in early trade was up 3 cents at $37.98 a barrel.
The break above $40 for U.S. crude is now in its third day and if dealers get comfortable with prices at those heights for the next week or so there could be an extended run of high-priced oil, according to Mr Paul Horsnell of Barclays Capital.
World oil demand is proving far stronger than expected this year, thanks to booming economic growth, the International Energy Agency said on Wednesday.
Other analysts think prices are far above the level justified by supply-demand fundamentals and are overdue a downward correction.
So far, leading OPEC producer Saudi Arabia's attempt to cool prices by proposing an increase in cartel supply quotas has failed. It has already signed off on more supplies to US customers in June.
Prices have bounced back strongly after an initial drop on Monday when Riyadh said it was seeking a rise in the cartel's official output limits of at least 1.5 million barrels per day.