Oil prices near $64

As the US shut its diplomatic missions in Saudi Arabia in response to threats, Britain warned that militants were in the final stages of planning strikes in the kingdom.

‘‘The latest security threats in Saudi Arabia, even though they’re not directed at oil installations per se, and the continuing refinery issues are having a supportive role,’’ said Marshall Steeves, an analyst at Refco Group in New York.

Concerns over the Saudi security situation coincided with news that another US refinery had run into output problems, adding to pressure on gasoline supplies in the world’s biggest consumer during peak summer demand.

News that Opec’s second largest producer Iran had resumed its nuclear work, despite European Union warnings of possible United Nations sanctions, further strained nerves.

In real terms, stripping out inflation, oil is still below the $80 a barrel on average for the year after the 1979 Iranian revolution.

But at an average of more than $53 for the year to date for US Crude, prices are well above those during the 1974 Arab oil embargo.

Encouraging dealers to push prices higher, energy inflation has yet to have a significant impact on economic growth, particularly in the world’s biggest consumers the US and China.

Naohiro Niimura, vice-president at the derivatives division of Mizuho Corporate Bank, said the world’s economy was coping with oil prices that have charged almost 50 per cent higher since the start of this year.

‘‘The (global) economy is tolerant to these high oil prices,’’ he said.

‘‘After the very strong pick-up in US growth data over the past few weeks, we believe the risk of a sharp slowdown in commodity demand looks negligible in the short term,’’ said Barclays Capital in a report.

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.

— Reuters