Oil prices retreated below the $44 mark yesterday after reaching a record 21-year high.

News of a fire at an oil refinery in the US had pushed the price of a barrel of crude in New York to $44.77, the highest level in 21 years, but this later fell back to $43.95.

In London, the cost of a barrel of Brent crude also retreated after reaching a record $41.50.

Motorists have been warned to expect petrol to remain above 80p a litre for the foreseeable future as a result of recent highs.

Although the fire, which closed a unit of BP's plant in Texas, was quickly extinguished, analysts said it was enough to send oil prices rocketing.

Richard Slape, oil analyst at stockbroker Seymour Pierce, said the news helped the price edge up towards $45, although it was only a short-term factor.

He said: "There is not a great deal of spare capacity, so when things like this happen it reminds people of the fragile state of the whole edifice at the moment. It creates a bit of nervousness and pushes the price higher.''

Fears of terrorist attacks, disruptions to Iraqi crude exports, and financial troubles at Russia's largest oil producer, Yukos, have all fuelled the soaring prices during the past week.

Middle Eastern oil cartel Opec said yesterday that it may decide at its meeting next month to increase its crude oil output.

Opec president Purnomo Yusgiantoro said: "We are ready to add another 1.5 million barrels a day, but will discuss it first during the next meeting in Vienna."