Aug. 9 (Bloomberg) -- Crude oil futures rose to a record $64.27 a barrel in New York after Valero Energy Corp. the third- largest U.S. refiner, said a fire at its McKee plant in Texas will cut gasoline production for five days.

The fire, which will cut daily gasoline output by 50,000 barrels, is the latest in a series of refinery breakdowns that helped push gasoline to a record yesterday. Threats of terrorist attacks in Saudi Arabia and the resumption of Iran's nuclear program heightened concerns about Middle East oil supplies and yesterday pushed crude oil above $64 for first time.

``There's been no let up in demand for gasoline,'' said Chris Mennis, owner of oil trader new Wave Energy in Aptos, California. ``The way they're having to run the refineries makes them prone to breakdowns.''

Crude oil for September delivery rose as much as 33 cents, or 0.5 percent, to $64.27 in after-hours electronic trading on the New York Mercantile Exchange. The contract traded at $64.19 at 9:18 a.m. Sydney time. It jumped 35 cents in 30 minutes to $64.25 after the Valero announcement.

The contract yesterday surged $1.63, or 2.6 percent, to close at a record $63.94 a barrel. It earlier reached $64, the highest price for the contract nearest expiry since oil futures began trading in 1983. Prices today are 43 percent higher than a year ago.

BP Plc, Exxon Mobil Corp. and Valero were among refiners that had unplanned shutdowns at U.S. plants during the past two weeks. Valero, ConocoPhillips and Sunoco Inc. reported further refinery problems yesterday.

Attack Plans

Terrorists in Saudi Arabia, the world's biggest oil producer, may be in the final stages of planning attacks there, the U.K. Foreign Office said yesterday. Iran, the Middle East's second-largest oil producer, has provoked a ``grave crisis'' by resuming uranium conversion work, French Foreign Minister Philippe Douste-Blazy said, according to Agence France-Presse.

``Threats over the weekend against U.S. government buildings in Saudi Arabia have the market nervous,'' said Rayola Dougher, an economist at the American Petroleum Institute in an interview from Washington. ``There were a couple of refining problems too over the weekend at some major refineries. Our refineries are already operating at very high utilization rates so any change in that tends to change the market.''

Iran resumed uranium conversion activities at its nuclear plant in the city of Isfahan yesterday in a move that could prompt the United Nations Security Council to impose sanctions on the Islamic Republic. The United Nations' International Atomic Energy Agency has called an emergency meeting to consider the issue later today.

``If they want to impose sanctions on Iran, they will just impose a blockade on their oil,'' New Wave's Mennis said.

King Fahd

The U.S. yesterday shut its Embassy in Riyadh and consulates in Jeddah and Dhahran because of a threat against U.S. government buildings in Saudi Arabia. The U.K. has allowed non-essential diplomatic staff to leave the kingdom if they wish.

The threats follow King Fahd's death on Aug. 1, which increased speculation about the stability of output from the region. Saudi security forces for more than two years have been battling suspected sympathizers of Osama bin Laden's al-Qaeda network, who have targeted Westerners in a bid to undermine the ruling al-Saud family and threaten the oil industry.

``There's a moment of weakness here with the Saudi changing- of-the-guard, said Don Morton, senior vice president of energy trading at Advest Inc. in Portsmouth, New Hampshire. This could present itself as an opportunity to challenge the Saudi political structure,'' he said.

`Going to $65'

``There's nothing that keeps us from going to $65,'' said Deborah White, a Paris-based senior energy analyst for Societe Generale SA.

``There are too many things going wrong for people to be short,'' said White, citing the terrorist threats, Saudi succession, refinery outages and the hurricane season in the Atlantic Basin. Shorts are bets that prices will fall.

Gasoline for September delivery touched $1.874 a gallon yesterday, the highest since trading began in 1984. The contract rose 1.4 percent to $1.8570 yesterday and was at $1.8674 in after- hours trading.

U.S. gasoline reserves have fallen for five straight weeks and at the end of last month were at their lowest since November. Inventories probably fell another 2 million barrels last week, according to the median forecasts from a Bloomberg survey of eight analysts.

Traders are ``watching at least six different refineries that have had some glitches,'' said Carl Adams, president of Illinois Ayers Oil Co. Adams' Quincy-based company operates 40 retail fuel outlets in Illinois and Iowa. ``That really fuels the upward trend. It just pushes those prices higher.''

ConocoPhillips

A two-week unit shutdown at Valero's refinery in Ardmore, Oklahoma, will cut daily gasoline output by 17,000 barrels and distillate output by 15,000 barrels, the company said.

ConocoPhillips, the largest U.S. oil refiner, suffered a power interruption over the weekend at its Borger, Texas, refinery, according to a filing with the state's Commission on Environmental Quality.

Sunoco Inc., the largest oil refiner in the U.S. Northeast, said two workers were injured during a weekend fire at its Philadelphia refining complex. The site can process 330,000 barrels of crude oil a day. The company wouldn't say whether production is affected.

To contact the reporter on this story: Gavin Evans in Wellington, New Zealand at gavinevans@bloomberg.net

Last Updated: August 8, 2005 19:34 EDT