Aug. 10 (Bloomberg) -- Crude oil in New York surged to a record $65 a barrel as refinery shutdowns and rising demand cut fuel inventories for the sixth straight week. Gasoline and heating-oil futures also touched all-time highs.

Gasoline consumption was up 1.4 percent for the four weeks ended Aug. 5 compared with the same period a year earlier, the U.S. Energy Department said today in a weekly report. Gasoline supplies fell 2.1 million barrels to 203.1 million barrels last week. The rate at which refineries operated declined.

``At the retail level we haven't seen a slackening in demand,'' said Jeff Lenard, a spokesman for the National Association of Convenience Stores, a trade organization based in Alexandria, Virginia.

Crude oil for September delivery surged $1.83, or 2.9 percent, to close at $64.90 a barrel on the New York Mercantile Exchange. Futures touched $65 a barrel minutes before floor trading ended. Prices are 46 percent higher than a year ago. The Nymex contract began trading in 1983.

The U.S. average pump price for gasoline rose 2.2 cents to a record $2.376 a gallon yesterday, according to the AAA, the former American Automobile Association. Prices are up 27 percent from a year earlier.

As retail prices rise, some motorists are buying lower grades of cheaper gasoline, Lenard said. ``Consumers are doing anything they can to make a difference in how much they're spending, short of using less.'' The group represents about 2,000 companies.

In London, September Brent crude-oil futures reached a record $64.20 during the session. Prices rose $2.01, or 3.2 percent, to close at $63.99 a barrel on the International Petroleum Exchange. Brent trading began in 1988.

Inflation

Adjusted for inflation, oil was more expensive during the 1970s.

Prices rose from 1979 through 1981 after Iran cut oil exports. The average cost of oil used by U.S. refiners was $35.24 a barrel in 1981, according to the Energy Department, or $75.44 in today's dollars.

The decline in gasoline stockpiles overshadowed an unexpected rise in crude-oil inventories. Oil supplies rose 2.8 million barrels to 320.8 million last week, the government reported. Stockpiles were expected to fall 1 million barrels, according to the median estimate of 10 analysts surveyed by Bloomberg.

Oil imports rose to 11.1 million barrels a day last week, the highest in a year, and the second-highest ever. Refineries operated at 95 percent of capacity, down 0.8 percentage point from the previous week.

`Tight' Gasoline

``We've seen a slowdown in refinery utilization tied to outages and that allowed crude oil to'' increase, said Jason Schenker, an economist at Wachovia Corp. in Charlotte. ``Higher imports also helped.''

Refinery units at Chevron Corp., BP Plc, Valero Energy Corp., Exxon Mobil Corp., Sunoco Inc. and ConocoPhillips had unplanned shutdowns in recent weeks.

``It looks like the gasoline markets are still quite tight,'' said Brian Hicks, who helps oversee $565 million at U.S. Global Investors in San Antonio. ``At first glance, it's somewhat bearish if you look just at the build in crude oil inventories.''

Supplies of gasoline are down 2.5 percent compared with the week ended Aug. 6, 2004, according to government figures.

Gasoline for September delivery rose 7.39 cents, or 4.1 percent, to $1.8963 a gallon in New York. The futures earlier touched an all-time high of $1.899 a gallon. The contract debuted in 1984. Prices are 54 percent higher than a year ago.

Credit Cards

``We're seeing skyrocketing usage of credit cards'' to pay for gasoline at the pump, Lenard said. ``In 2004, 54 percent of our customers paid with credit cards. This year it's around 70 percent or higher, so far. Either they don't have the cash in their wallets, don't want to spend it or are displacing the pain'' of higher retail prices. ``It's probably a combination.''

Crude oil accounts for about half the cost of a gallon of retail gasoline.

``The good news is once we get through August, demand slacks off for gasoline. The bad news is demand increases for diesel,'' Lenard said.

The peak-demand summer driving season runs through the U.S. Labor Day holiday on Sept. 5. Demand for heating oil, part of a category known as distillate fuels, increases in the fourth quarter as heating demand peaks.

September heating oil futures rose 6.22 cents, or 3.5 percent, to $1.8388 a gallon in New York after rallying to a record $1.842 a gallon, the highest since trading began in 1978. Prices are 57 percent higher than a year earlier.

Fund Buying

Domestic heating-oil inventories surged by 4.3 million barrels to 54.2 million barrels last week, according to the Energy Department. Supplies are 14 percent higher than a year ago.

``The fundamentals are bearish,'' said Bill Vitro, a trader for Harrison, New York-based Castle Oil Corp., the largest independent heating-oil distributor in the New York City region. ``It's nothing more than a lot of fund buying. They come in and buy and keep buying,'' he said.

Crude oil futures for delivery in December this year through May 2006 closed above $67 a barrel.

To contact the reporter on this story: Heesun Wee in New York at hwee1@bloomberg.net.

Last Updated: August 10, 2005 16:32 EDT