Oil prices pulled back from a record $135 a barrel today as dealers took profits from a rally as a recovering US dollar dampened all commodities markets.
US crude dipped 95 cents to $132.22 a barrel by 4.50pm after jumping earlier in the session to a record $135.09. London Brent crude eased 69 cents to $132.01 a barrel after touching a peak of $135.14.
Dealers also noted selling across commodities markets as the dollar recovered after US data showed jobless claims fell.
Crude prices have rallied more than 30 per cent since the start of the year, driven by worries about tight stocks of refined products in the near term and mounting global demand over the longer term.
Oil has risen sixfold since 2002, propelled by rising consumption in China and other developing countries.
Oil prices had surged yesterday after US weekly data showed crude stocks had declined by 5.4 million barrels. Analysts had expected an increase.
The United States has repeatedly called on the Organization of the Petroleum Exporting Countries (OPEC) to boost its output to try to calm markets, but the group has said no increase is needed.
OPEC Secretary-General Abdullah al-Badri said today the group can do nothing to lower oil prices, and called the oil market "crazy".
US Energy Secretary Sam Bodman yesterday said high oil prices reflected tight supplies and strong global oil demand.