The latest rises are causing worries in importing countries about the economic cost of higher energy prices.

Higher fuel prices can cause unwelcome rises in inflation, restrict economic growth and are unpopular with voters.

Major oil exporters are divided between those such as Saudi Arabia and Kuwait that favour lifting output in an attempt to ease prices, and those such as Venezuela that argue against conciliatory moves towards big consumers, principally the US.

The price of US-traded light, sweet crude rose on 28 July to as much as $43.05 a barrel while UK-traded Brent crude from the North Sea reached about $40 a barrel.

BBC News Online explains why prices are so high.

RISING DEMAND

Global economic expansion is driving what the International Energy Agency says is the biggest increase in oil demand for 16 years.

There is higher than expected demand in industrialised countries and China's rapidly expanding economy has created a huge demand boost.

US demand has risen because of strengthening economic recovery and greater need for higher grade crude oil suitable for processing into petrol (gasoline) for the fuel-hungry Sport Utility Vehicles (SUVs) popular with US drivers.

Chinese demand is up 20% over the past year. Traders are betting this rapid growth will continue for several years although there is some chance that the economy will "overheat" and oil demand growth will slacken.

Among suppliers only Saudi Arabia has significant spare capacity that it could make available to the market.

LOW STOCKS

Oil companies have tried to become more efficient in recent years and operate with lower stocks of crude oil.

This means there is less of a cushion in the market against supply interruptions.

Events such as violence in the Middle East, ethnic tension in Nigeria and strikes in Venezuela have had a greater effect on prices in the past year than might have been the case if stock levels were higher.

OPEC STRATEGY

The producers' cartel Opec accounts for about half of the world's crude oil exports and attempts to keep prices roughly where it wants them by trimming or lifting supplies to the market.

In the past, Opec ministers tended to wait for prices to dip before agreeing to cut output.

But Opec is now acting more aggressively, announcing production cuts to pre-empt any weakening in prices.

International oil companies traditionally used times of seasonally weaker demand, when prices were lower, to rebuild stocks.

These windows now appear to have been closed.

Data error is an additional factor, some analysts say.

Consumption forecasts by market experts turned out to be too low. The result was that producers kept supplies even tighter than was needed to prevent rebuilding of stocks.