New York crude futures settled up 84 cents to $31.88 a barrel, tracking a more than 9 cent spike in gasoline futures to $1.0993 a gallon, just below a 9-month record hit midday. In London, benchmark Brent crude jumped $1.09 to $29.93 a barrel.

The United States faces the lowest gasoline supplies since November less than two weeks ahead of the Labour Day holiday weekend, when a record number of drivers are expected to hit the roads for vacation.

The surge in futures prices is bad news for consumers already suffering fuel lines in Arizona after a pipeline outage, and a spike in pump prices in the Midwest after last week's blackout forced seven refineries in the Midwest and Canada to shut down.

Futures prices began their rally on Wednesday after US government data showed a fall in overall crude stocks and also in gasoline supplies to their lowest levels in nine months.

"The statistics inspired strength, and gasoline seems to be the order of the day," said Tony Machacek of Prudential Bache brokerage.

An official at the Energy Information Administration, the statistics arm of the US Department of Energy, said gasoline demand has been reaching record levels as Americans have continued to avoid flying since the Sept. 11, 2001 attacks.

"People are driving like crazy," the official said.

A record 28.2 million US travellers are expected to motor more than 50 miles by car on the coming Labour Day weekend, up 2.2 per cent from last year, according to a survey by the American Automobile Association.

The price rally gained momentum Thursday as refinery problems in the United States and Europe stoked concerns about low inventory levels.

Last week's massive power outage in North America led production to be halted at seven refineries.

Most of those refineries have since resumed production, but on Thursday traders were concerned about a series of refinery problems in California and an outage in a pipeline supplying gasoline to Phoenix, Arizona.

Overall US crude stocks have remained below year-ago levels for months following supply disruptions from producer nations Iraq, Venezuela and Nigeria.

Many in the market are resigned to Iraqi oil exports probably not returning to pre-war levels in the near future as attacks on oil pipelines and power lines have hampered efforts to restore supplies.

Traders are also nervous about political tensions in Venezuela, another vital supplier of crude to the United States, where opponents of President Hugo Chavez have called for a referendum on his rule.

Earlier this year, a massive strike launched by opponents of Chavez choked off the country's oil exports, though some analysts say new disruptions to supply from Venezuela are unlikely since thousands of striking oil workers were fired and replaced with Chavez supporters.

Exports from OPEC member nation Nigeria were also disrupted in March by unrest in the country's oil-producing region.

But fears of further interruption of Nigerian supplies subsided after leaders of rival ethnic groups declared a cease-fire in the southern Nigerian oil city of Warri on Wednesday, the local state government said.