Fears were growing last night that oil prices could reach $60 a barrel after the cost of crude in New York hit another milestone.

The latest rise to $55.33 yesterday afternoon came amid continued concerns over winter fuel supplies.

Economists said the sky-high levels were already having an impact on the economy and manufacturing, although at a lesser rate than during the 1970s.

Motorists have also been feeling the pinch, with the cost of unleaded petrol on UK forecourts now at an average of 83.66p a litre, the AA reported.

CBI director general Digby Jones also warned that the manufacturing recovery was under threat because of the rising price of oil and other commodities.

Richard Slape, of stockbroker Seymour Pierce, said he expected the cost of crude to continue to drive forward in the short term.

He said: "To say 60 by the end of the year certainly doesn't seem unrealistic."

Short supplies and growing demand - worsened by factors such as disruption in Iraq and recent hurricanes - have pushed the cost of crude consistently higher.

The price of oil has soared almost 75 per cent higher over the past 12 months.