No Ceiling Yet for Oil

Updated from 1:30 p.m. EDT

Oil prices jumped to another record high Monday as crude traders continued to stock up ahead of a possibly tight fourth quarter. The election of a hard-line government in Iran over the weekend also had the bulls running.

The August crude contract settled up 70 cents to $60.54 a barrel on Nymex after briefly surpassing $61. Gasoline futures gained 2 cents to $1.67 a gallon.

Crude has surged almost 30% since touching $46.80 a barrel on May 20, fueled by growing concerns over global refinery shortages. In the U.S., demand for distillates has jumped by a surprising 7% since last year, raising concerns that it won't be met with adequate supplies.

Iran, the fourth-largest OPEC producer, injected more uncertainty into the market after conservative Mahmoud Ahmadinejad was elected president. Any change at the helm of an oil producing country sends the market into jitters over future supply policies.

"The new Iranian president is a source of concern today," says Mike Fitzpatrick, energy analyst at Fimat USA. "He is no friend of the West. A worst-case scenario could be that his policy would stand in contrast to U.S. interests," he says.

Meanwhile, the Organization of Petroleum Exporting Countries has been eager to bring down prices to stem a possible mass migration to alternative energy sources. The cartel's failure to ease the frantic market with the only weapon it has -- higher production quotas -- has further exacerbated concerns that prices are going to remain high for an extended period.

Many analysts and economists seem to think that the only chance of relief is an economic recession spurred by the run in oil itself.

OPEC President Sheikh Ahmad Fahd al-Sabah said on Saturday that "prices are $60 a barrel, but the market is well-supplied," Bloomberg reported. The cartel is expected to decide upon another 500,000 barrel production increase within a week. Prices have gone up 10% since it last bumped up production two weeks ago.