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NEW YORK (CNN/Money) -
Oil prices struck a fifth-straight record high Friday, as strained refinery outputs and solid U.S. demand conspired to push crude above $67 a barrel.
U.S. light crude for September delivery settled $1.06 higher at $66.86, off the record $67.10 a barrel hit earlier in the day.
The front month U.S. contract has risen 52 percent since the start of the year and may track higher, as there have been few signs that high oil prices have hurt economic growth and demand is seen as strong.
"This rally is the perfect storm," said Fadel Gheit, an oil analyst at Oppenheimer. "It's surreal, it's like watching a movie."
Analysts cited a confluence of factors for high prices that some oil executives and traders considered highly unlikely at the beginning of the year, including strong global economic growth and strong demand growth.
Tight crude supplies and spare production and refinery capacity that are for all practical purposes considered non-existent were also cited as reasons for the rally, exacerbated by mounting tension between the U.S. and Iran.
"And there is no near-term solution for any of these things," said Gheit.
Katie Townshend, chief market technical at MKM Partners, said her target was for crude to soon hit $68 a barrel, which when adjusted for inflation is still below the $80 a barrel highs hit in the 1970s.
Gasoline prices rally
The fact that refiners are struggling to keep up with demand for finished products has pushed gasoline prices to record highs and helped boost crude prices.
The nationwide average retail price for a gallon of gasoline hit a new record high Friday at $2.413. (Full story.) And gasoline futures hit a new record at $2.003 on the NYMEX.
Fears of a gasoline shortage were sparked after the International Energy Agency cut its estimate of non-OPEC supply growth, saying that producers would not deliver as much oil as expected this year and OPEC would have to fill the gap.
An earlier report from the Energy Information Administration also supported prices, saying that gasoline inventories in the world's largest consumer dipped last week.
"We're a lot of positive short- and long-term momentum that began on Monday when oil broke through a key technical level," said Townshend. "The EIA report helped draw attention to this."
Refinery troubles have added to the supply scare, with several units at BP (up $0.10 to $70.68, Research) and ConocoPhillips (up $0.35 to $66.75, Research) shut down this week.
Moreover, the record-setting prices have not made much of a dent in demand, with the EIA saying that gasoline demand is up an average 1.4 percent over the last four weeks.
There are several weeks of peak summer driving season still to go, according to the government.
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-- from staff and wire reports
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