Oil prices hit a new peak

OIL PRICES on both sides of the Atlantic hit record highs again today as an explosion and fire at a large BP refinery in the US added to fears of unrest in Venezuela and further disruption in war-torn Iraq .

In London, Brent crude traded rose to $42.85 and in the US, Nymex crude soared 40 cents to $45.90 a barrel.

BP said it had shut a hydrotreating unit in its 420,000 barrel-per-day (bpd) refinery in Indiana after an explosion. The hydrotreater lowers the sulphur content of crude oil.

Anxious motorists have already been warned to expect another 1p a litre on petrol prices during August.

The latest surge in the cost of crude came as heavy fighting in southern Iraq renewed fears of a disruption of the country's vital oil supplies.

The possibility of unrest in Venezuela, where President Hugo Chavez faces a referendum on his rule this weekend, also weighed on markets.

Analysts said a defeat for Chavez could disrupt oil shipments from Venezuela, which provides between 12% and 13% of America's imports.

Bruce Evers, oil analyst at Investec Securities, said this could have severe consequences, adding: 'It's going to be a very nervous weekend for oil traders.' He said forecasts suggested the cost of crude could move 'quite a bit higher' than it is now.

Fears of terrorist attacks, disruptions to Iraqi crude exports and financial troubles at Russia's largest oil producer, Yukos, have all fuelled soaring prices. These have piled pressure on already tight global supplies of crude.