Oil prices soared to near $63 today, fuelled by growing worries over tensions in the Middle East and concerns about summer fuel supplies.
September crude on the New York Mercantile Exchange gained as much as 58 cents to reach a new high of $62.89 a barrel. London Brent crude rose 17 cents to $61.24 a barrel.
The United States said the closure of its diplomatic base in Riyadh and consulates in Jiddah and Dhahran today and tomorrow was "in response to a threat against US government buildings".
Meanwhile, Iran was pressing ahead with plans to restart nuclear work, risking a confrontation with the European Union which has warned OPEC's second biggest producer of possible UN sanctions.
A string of refinery outages also fuelled an increase in prices, adding nearly 3 per cent last week as almost daily refinery problems raised doubts about whether summer fuel supplies would comfortably last the month.
Although there is only about one month left in the traditional summer demand period, dealers said a late-season price rally could not be ruled out.
US refineries have been hit by more than half a dozen unplanned outages in the past few weeks as plants show the strain of trying to keep up with two years of unexpectedly strong demand growth after a decade of underinvestment.
Fuel supply concerns were complemented by fresh uncertainties in top Middle East producers following the death of Saudi Arabia's King Fahd and the election of a hardline president in Iran.