Crude oil stayed close to record highs above US$112 a barrel today - promising more pain at the petrol pump for motorists.
Concerns over supplies and a weakening dollar kept up pressure on prices, which peaked at a new high of $112.21 in New York yesterday.
The latest surge in oil prices came after data showed a shock drop in US supplies.
The US Energy Information Administration's inventory report, closely watched by the market, showed that US crude stocks fell by 3.2 million barrels last week.
Further weakness for the dollar also kept oil near record levels as the euro hit a new high above 1.59 against the faltering greenback.
Traders have bought oil as a hedge against the weakening currency as the US Federal Reserve slashes rates in a bid to revive a slumping economy following the credit crunch.
The European Central Bank has held interest rates steady in the Eurozone, adding to the strength of the currency against the dollar.
Brent crude also reached a new record today, peaking above US$109.
A gloomy report by the International Monetary Fund yesterday also fuelled oil prices after predicting the US is heading for recession, dampening global growth.
Financial markets took the grim news as a sign of further interest rate cuts from the Fed.
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