Oil hit a record high of $107 a barrel today as investors sought oil as a hedge against a depressed dollar and inflation.
A rush by financial funds into commodities and political tensions are the prime drivers of a rally that has lifted oil's average to above $95 for the year.
US crude jumped $1.85 to $107 a barrel. It had sunk to $104.08 in earlier trading and by 1451 was up $1.50 at $106.65. London Brent crude was up 40 cents at $102.78.
Fears of recession, following the biggest US job losses in five years and strains in the credit market, have depressed equities and the dollar while prompting many investors to seek safety in commodities including oil.
READ MORE
The effect of the slowdown in the United States could start to have an impact on demand.