June 27 (Bloomberg) -- Crude oil rose to a record in New York after Iran, OPEC's second-largest producer, elected a president who promised to pursue the country's nuclear power program, increasing tension with the U.S.

Crude oil for August delivery rose as much as 63 cents, or 1.1 percent, to $60.47 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $60.27 a barrel at 2:44 p.m. Singapore time.

``It's Iran's right'' to develop nuclear energy, President- elect Mahmoud Ahmadinejad said yesterday. Ahmadinejad, a founder of the group that stormed the U.S. embassy in Iran in 1979, has rejected dialogue with the U.S., which accuses the country of seeking to develop nuclear weapons.

``This is one other thing that you don't need when there's no slack in the system,'' said Anthony Nunan, manager of international petroleum business at Mitsubishi Corp., Japan's biggest trading company. ``The U.S. will probably put pressure on Europe and Japan to withhold investments,'' in Iran's oil industry.

Record oil prices caused shares to decline because of concern rising energy costs will slow economic growth. The European Commission may lower its 2005 growth forecast for the third time in eight months if the cost of oil stays at $60 a barrel, European Union Monetary Affairs Commissioner Joaquin Almunia said on June 25.

Iran's Ahmadinejad, who won the presidential election on June 25, said yesterday he will give domestic companies priority in developing the oil and gas industry. That may slow efforts to boost Iran's oil output at a time when oil producers are straining to boost supplies, Mitsubishi's Nunan said.

Brent

On June 24, oil rose 42 cents, or 0.7 percent, to $59.84 a barrel, the highest closing price for a contract closest to expiration since trading began on the exchange in 1983. The contract rose 66 cents, or 1.1 percent, last week.

Brent crude for August delivery rose as much as 68 cents, or 1.2 percent, to $59.04 in after-hours electronic trading. It traded at $58.82 a barrel at 2:44 p.m. Singapore time.

Today's rally may have been driven by orders fixed earlier to buy oil if it rose above $60 a barrel by traders who use charts to make trading decisions, said Ashok Sekar, senior client adviser at Tricom Futures Services Pty in Surfers Paradise, Australia.

``Ever since we opened on Nymex this morning, we've had some heavy volumes coming through,'' Sekar said. ``For today I think the market will be fairly comfortable trading above $60.''

Demand

World oil demand may rise by as much as 2 million barrels a day this year, led by surging consumption in China, Michael Smith, head of energy analysis at London-based BP Plc said today in Jakarta. Brent crude oil may average more than $50 a barrel until the end of the year, BP's Smith said.

China's oil demand may rise by 500,000 barrels a day in the second half of this year, Smith told reporters in Jakarta today. China's demand rose 15 percent to 6.7 million barrels a day in 2004, BP said in its annual Statistical Review of World Energy published on June 14.

In a weekly Bloomberg survey, 24 of 50 analysts, or 48 percent, said oil prices will rise this week. Sixteen, or 32 percent, said they will fall, and 10 forecast little change.

Saudi Aramco, the world's largest oil company, will supply more oil next month to customers in the U.S. as demand increases during the so-called ``driving season,'' said shipbrokers including Oslo-based Lorentzen & Stemoco AS.

More Saudi Oil

Saudi Aramco has been stockpiling oil, according to Lorentzen, which based its estimate on oil output figures and the number of tankers sailing from the Persian Gulf this month.

Crude oil tanker rates on routes from the Persian Gulf rose 20 percent last week from a 20-month low after Saudi Aramco and other oil companies hired 40 so-called very large crude carriers, or tankers that are able to carry 2-million barrels of oil each. That compares with an average 25 ships a week so far this year.

U.S. crude-oil stockpiles have dropped three weeks in a row, raising concern that producers won't keep pace with refiner needs as they make gasoline for summer travel and store heating oil for winter. Demand for oil-based fuels in the past four weeks was 1.7 percent higher than a year earlier, the U.S. Energy Department said June 22.

The Organization of Petroleum Exporting Countries, source of 40 percent of the world's oil, will probably ship less in the four weeks ending July 9, according to Oil Movements, a company that tracks tanker movements.

OPEC

The producer-group is scheduled to ship 24.2 million barrels a day in the four weeks ending July 9, down 60,000 barrels from the previous four weeks, Halifax, U.K.-based Oil Movements said in a report on June 23.

European Central Bank President Jean-Claude Trichet, Bank of Japan Governor Toshihiko Fukui and Federal Reserve Governor Edward Gramlich may today warn about the impact of record oil prices on world economic growth. Central bankers are attending the annual meeting of the Bank for International Settlements, which is controlled by 55 of the world's largest banks.

``For the time being that might be the biggest risk,'' Fukui told reporters in Basel, Switzerland, yesterday. High oil prices are also a risk for Japan, he said.

Japanese stocks fell today after oil rose, with exporters such as Sony Corp. and Toyota Motor Corp. leading the decline.

``The record oil price is a sentiment-damper that makes investors risk averse,'' said Atsushi Osa, who helps manage more than $100 billion at Sumitomo Mitsui Asset Management Co. in Tokyo.

$100 Oil

Finance ministers from the European Union and Asia have called on OPEC to boost production, saying higher prices pose a threat to global economic growth.

Oil prices could rise to $100 a barrel in New York if instability continues in producing countries such as Iraq and Nigeria, Algerian Oil Minister Chakib Khelil said, according to the Arabic-language Saudi newspaper Okaz on June 25. Political instability will have an impact on oil output even if OPEC boosts its capacity in the next two to three years, Khelil said.

Concern that rising oil prices may threaten global growth prompted OPEC on June 15 to raise quotas for a fifth time in a year to 28 million barrels a day. The group is considering adding an extra 500,000 barrels a day if prices stay above $50.

To contact the reporters on this story: Nesa Subrahmaniyan in Singapore nesas@bloomberg.net; Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net.

Last Updated: June 27, 2005 03:26 EDT