Oil climbed above $82 a barrel today, near a record reached a day earlier after the US Federal Reserve slashed interest rates to calm worries over economic growth ahead of peak winter fuel demand.
US light crude for October delivery rose 72 cents to $82.23 a barrel by 6.39am, after gains of 94 cents yesterday, when prices hit a fresh record of $82.38. London Brent crude gained 68 cents to trade at $78.27 a barrel.
The Federal Reserve chopped US interest rates by a hefty half-percentage point yesterday, in a bid to shield the economy from a housing slump and financial turbulence, sparking an equities and commodities rally and giving oil another boost.
"Now the market is going to be searching for $85 a barrel," said Tony Nunan, risk management executive at Mitsubishi in Tokyo.
Oil prices, which have gained more than a third since the start of the year, have risen on hurricane threats and other supply risks, fund flows into energy from poorly performing equity markets and falling US inventories.
US crude oil supplies are forecast to have dropped for the fourth week in a row last week, down by 2 million barrels as imports shrank further, said industry analysts polled by Reuters ahead of government data later on Wednesday.
"If we get a big drop in inventories, like three to seven million, then prices could get there in a hurry," Mr Nunan added.
Crude stocks are already at the lowest level in eight months.
Gasoline stocks probably dropped for the seventh-straight week, as demand remained strong while production may have dropped because three Texas refineries temporarily shut due to Hurricane Humberto, though distillate stocks were seen rising.