US light sweet crude for September delivery rose 46 cents to $60.40 a barrel, off an earlier high of $60.42, less than three per cent below its July 7 record high of $62.10.

London Brent crude was up 48 cents at $59.24 a barrel.

A fire on Thursday at BP’s giant Texas City refinery forced the company to shut a desulphurisation unit, but did not disrupt production elsewhere. The fire, brought under control yesterday morning, comes four months after an explosion at the refinery killed 15 workers.

The disruption at the third-largest refinery in the US coincided with a fire at Murphy Oil’s 110,000bpd refinery in Louisiana earlier on Thursday.

The fire forced the company to shut an 18,000bpd kerosene hydrotreater, though a spokesman said runs should not be affected.

The latest shutdowns underscored concern about tight refinery capacity and the market’s sensitivity to any outages.

“People are looking at the fear of disruption in gasoline supplies,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures.

US inventories of gasoline fell more sharply than expected last week, raising questions about whether refiners could meet peak summer driving demand at the same time as stocking up on winter fuels.

U.S. gasoline demand in the last four weeks has averaged 2.4 per cent higher than a year ago, US data showed. Demand for distillates, which include heating oil and diesel, was up 3.6 per cent.

Asia less buoyant: Dealers noted that soaring oil prices were starting to undercut demand in Asia, forcing refiners to reduce operations and economists to revise down growth forecasts.

South Korean oil refiner SK Corporation will cut its planned crude processing rate for August by four per cent due to weak refining margins, a company source said, following the lead of Chinese and Japanese rivals.

“It is very difficult to buy at over $60 to be honest,” Emori said. “Cycle-wise, commodity prices should be going down but funds are still looking to buy.”

In Japan, top refiner Nippon Oil Corp. said it would keep running at reduced rates in August of 974,000bpd, seven per cent less than a year ago and well below its 1.2 million-bpd capacity.

A Reuters poll of more than 100 analysts on Thursday showed that with the notable exception of India and China, high fuel prices and sluggish exports were hurting growth around Asia.