The risk of stagflation -- persistently high inflation and low economic growth -- is seen as low so far but 60-dollar oil could puncture business and consumer confidence in the region, economists told AFP.

"I think it will have an impact... sentiment will be affected," said Nizam Idris, deputy head of research at IDEAglobal.com.

"As a consumer, you will be careful with your expenditures. It will have a psychological effect which will filter through to decision-making from consumers to producers," he said.

Julian Jessop, the chief international economist at London consultancy Capital Economics, also agreed crude prices at 60 dollars a barrel would deal a psychological blow to the region.

"There is no doubt 60 dollars would have a significant impact. Psychologically, clearly a price that high is going to be a big problem," he said.

Despite the warnings, Jessop said Asia was still in a better position to cope with higher oil bills than other regions because its economy is in stronger shape.

"I think paying a bit more for oil is not going to be the end of the world for Asia where growth has been strong for some time," Jessop said.

"Asia can afford to pay more for its oil compared to, say, Europe where the economic recovery is still very weak," he said.

Analysts say crude prices are now within striking distance of 60 dollars a barrel after New York's main contract, light sweet crude for delivery in December, set a record of 55.50 dollars in New York trading Friday and finished at a record settlement of 55.17 dollars.

"I certainly wouldn't rule out 60 dollars in the current environment. Virtually anything is possible," said Daniel Hynes, a Melbourne-based energy analyst at ANZ Bank.

Unusually low US heating oil stocks ahead of the northern hemisphere winter and insatiable demand from a still booming Chinese economy are among the key reasons behind the sharp spike in crude prices in recent weeks.