Thursday, July 6 2006 10:31 Hrs (IST) - World Time -

New York: Oil prices jumped to a record above US$ 75 a barrel, propelled by a rally in gasoline that analysts said could send average US pump prices past US$ three a gallon by the weekend.

"Recent snags in oil-shipping and refining along the Gulf Coast have raised traders' concerns about motor-fuel supplies at a time when demand continues to rise despite soaring prices. The start of a new fiscal quarter also has brought more speculative money into the market," brokers said.

"Everybody thought we'd hit a price that would create permanent demand destruction. But demand for gasoline is rising," said Alaron Trading Corp analyst Phil Flynn.

"Once again the American public has shown its ability to get over paying high prices for gasoline," he said.

A protracted diplomatic standoff between the West and Iran, OPEC's No 2 oil supplier, has kept a high floor beneath prices, and analysts said geopolitical tensions were heightened further yesterday by North Korea's test-firing of missiles.

Light sweet crude for August delivery briefly surged to US$ 75.40 a barrel on the New York Mercantile Exchange before easing back to settle at US$ 75.19, an increase of USD 1.26.

Gasoline futures jumped by more than 5.7 cents to settle at US$ 2.2758 a gallon, heating oil closed at US$ 2.0626 a gallon, up 3.4 cents.

In London, Brent crude futures rose US$ 1.47 to settle at US$ 73.98 a barrel on the ICE Futures exchange.