OIL prices today touched dollars 60 a barrel for the second consecutive day, prompting speculation from analysts that prices would rise further next week.

Prices are rising on the back of robust demand and consumption in some of the world's biggest economies, such as the United States, China and India.

Refining capacity is struggling to cope with demand, adding to upward pressure on prices, as is betting on price movement by hedge funds and other speculators. US crude futures on the New York Mercantile Exchange traded up 39 cents to dollars 59.81 a barrel, having earlier reached a peak of dollars 60 to match Thursday's record - the highest since the contract began trading in 1983.

"The big message this week was that demand is still staying strong in the face of high oil prices," said Tony Nunan, manager at Mitsubishi Corporation's international petroleum business in Tokyo. He added: "Inventories are starting to be drawn out so that could push the market higher."

A survey of 50 oil analysts by Bloomberg saw almost half predict prices would continue to increase next week, with ten per cent seeing no change and 32 per cent expecting a fall.

The dollars 60-a-barrel level means oil prices have risen by about 38 per cent since the beginning of the year. Despite that, analysts say that soaring prices are having little effect in curbing demand, leaving the global supply chain with little slack in the event of an unexpected disruption.

Higher temperatures and demand from motorists over the holiday season can add to oil demand, as drivers use their cars more and increased demands are placed on oil-based fuels in power plants as air conditioners run more.

"Oil demand will increase when facing summer and winter. We are worrying that the tendency is that (prices) will increase," Purnomo Yusgiantoro, the oil minister for OPEC member Indonesia said.

US government data on Wednesday showed a fall last week in crude oil stockpiles as refineries worked at close to full throttle to meet demand.

"The bottom line is that a market that can't go down goes up," said John Brady of ABN AMRO. "As long as the economy and the stock market advances or holds its ground then energy can continue to move on."

Members of OPEC are already running near maximum capacity and say they are powerless to stem crude's rally. Saudi Oil Minister Ali al- Naimi has said the kingdom, the world's biggest exporter, is able to lift output but that at present there was no demand for extra crude from the world market due to bottlenecks in the global refining system.

Dariusz Kowalczyk, senior investment strategist at CFC Securities in Hong Kong, said: "We expect prices to rise as global demand for oil typically increases from June. We think each month this year from June onwards will see higher demand."

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