Oil prices touch all-time record above $60 a barrel

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Crude prices reached $60 a barrel amid high demand for petrol and diesel and worries about lack of spare refining capacity.

The West Texas Intermediate contract for August delivery hit $60 on the New York Mercantile Exchange, up almost $2 during the session, bringing the gains for this year to almost 40 per cent.

The spike on Thursday was triggered by a strong rise in petroleum product futures, particularly heating oil, which also acts as a proxy for diesel and jet fuel prices. The July Nymex heating oil contract gained 4.54 cents to $1.6680 a gallon and widened its unseasonable premium to the July Nymex gasoline futures contract, which added 4 cents to $1.6520 a gallon.

The heating oil and gasoil prices were pushed higher by strong demand.

The US department of energy, said that US distillate demand, which includes heating oil, diesel and jet fuel, had grown faster this year than gasoline demand. It said the four-week average for total distillate fuel demand was 6.9 per cent higher than last year, while the four-week average demand for finished gasoline is only 2.5 per cent higher than last year.

The department said in a weekly note that distillate demand is also strong in Europe, where a significant portion of the new vehicle fleet is diesel-powered, and in China, where demand for distillates is twice that for gasoline, and where overall demand has been growing rapidly.

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