No Stopping Oil Prices

Updated from 12:54 p.m.

Saudi Arabia's commitment to increase production was pushed aside by immediate supply pressures Monday as traders erased early losses and pushed crude oil prices above $41 a barrel to a record high in New York.

The benchmark U.S. crude closed up $1.79, or 4.3%, to $41.72, topping the previous record high of $41.55 on May 17 on the New York Mercantile Exchange. Gasoline prices closed up 4.1 cents, or 2.9%, to $1.458 a gallon, another NYMEX record.

Analysts said higher U.S. demand compounds existing world demand, stretching the market and making it vulnerable to short-term disruptions. That is exactly what happened Monday. News of reduced production because of a pipeline bombing in Iraq, a breakdown on Shell Oil's U.S. Gulf Mars drilling platform in the Gulf of Mexico, and a scheduled maintenance shutdown in Kuwait turned into a price spike as the market also reacted to the effect of a weekend fire at a Renton, Wash., gasoline pipeline. ...