Aug. 9 (Bloomberg) -- Crude oil in New York fell, retreating from a record $64.27 a barrel, after the U.S.'s two largest fuel producers said output is returning to normal at plants in Texas and Illinois.

ConocoPhillips, the largest U.S. refiner, is scheduled to resume operations at unit closed Aug. 6. Exxon Mobil Corp., the second-largest, said it restored production over the weekend at a facility shut since July 30. Prices have climbed 3.7 percent in four sessions on concern about Saudi supplies.

``Crude-oil inventories are in decent shape and heating oil is in great shape,'' said Andrew Lebow, a broker with Man Financial Inc. in New York. Oil prices got too high yesterday when the oil market ``went into high-anxiety alert.''

Oil for September delivery fell 87 cents, or 1.4 percent, to $63.07 a barrel on the New York Mercantile Exchange, the first decline in four sessions. The futures earlier reached $64.27 a barrel, the highest intraday price since the contract debuted in 1983. Oil is 41 percent higher than a year ago.

Gasoline for September delivery also fell from a record, declining 3.46 cents, or 1.9 percent, to $1.8224 a gallon in New York. The price yesterday rose to $1.874, the highest intraday price since the futures began trading in 1984. The futures are up 47 percent from a year earlier.

Correlation

Oil and gasoline prices have moved almost in lockstep this year. The two products have a correlation coefficient of 0.9 on a scale that measures the coincidence of closing price gains and declines. A reading of 1 would show they move in unison.

The price surpassed the previous intraday record of $64 a barrel reached yesterday. A threat to the U.S. embassy in Saudi Arabia heightened speculation that supplies from the country, the world's largest oil exporter, could be jeopardized. Oil is up 42 percent from a year ago.

U.S. oil inventories at 318 million barrels for the week ended July 29 are 7.3 percent higher than the five-year average, according to the Energy Department.

Domestic supplies of heating oil at 49.9 million barrels are up 4.9 percent from the five-year average, government figures show.

Oil prices have surged to records this year partly on concern consumption will outpace refineries' ability to produce enough fuel in the fourth quarter, when heating demand peaks.

Such worries may be overdone, Lebow said. ``We've been worrying about the fourth quarter'' of this year ``since the fourth quarter in 2004.''

In London, September Brent crude-oil futures fell from a record, declining 72 cents, or 1.2 percent, to $61.98 a barrel on the International Petroleum Exchange. The futures earlier today touched an all-time high of $63.06 a barrel, exceeding yesterday's record of $62.76. Brent trading began in 1988.

Refineries

ConocoPhillips' refinery in Borger, Texas, has the capacity to process 146,000 barrels of crude oil a day. Exxon Mobil's refinery in Joliet, Illinois, can process 240,000 barrels of oil a day.

Refinery units at Chevron Corp., BP Plc and Valero Energy Corp., also had unplanned shutdowns in recent weeks. ``When you run at these heavy levels, you're going to have issues and that's what has been happening,'' said Subash Chandra, an oil analyst at Morgan Keegan Inc. in New York.

The rate at which refineries operated rose to 95.8 percent of capacity in the week ended July 29, according to government data. It was the second straight weekly gain. Plants increased their operating rate to 98.1 percent of capacity the week ended July 1, the highest since 1999, the Energy Department reported.

Rising refinery runs have been offset by declines in gasoline inventories. Motor-fuel stockpiles fell for five straight weeks, according to the government.

Gasoline Demand

Gasoline demand during the four weeks ended July 29 is up 1.1 percent from the same period last year, according to the Energy Department.

``Gasoline demand hasn't softened much,'' Chandra said.

Prices at the pump rose to a record for the second day in a row. Crude oil accounts for about half the cost of a gallon of retail gasoline.

The national retail average gained 1.5 cents to a record $2.354 a gallon yesterday, according to the AAA, the former American Automobile Association. The average surpassed the previous record of $2.339 a gallon reached on Aug. 5.

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

Last Updated: August 9, 2005 16:40 EDT