Oil leapt more than 1 per cent today to top $96 for the first time after an unexpected sharp fall in US crude stocks and data showing strong economic growth.
The rise toward oil's inflation-adjusted peak of $101.70 from April 1980 was supported by US dollar weakness after a Federal Reserve interest rate cut.
US oil for December delivery rose as high as $96.24 a barrel in electronic trade. By 7.29am (Irish time) it was up 86 cents at $95.39 a barrel, paring some gains. December Brent crude also hit its record high of $91.63, up $1 on the day.
Oil soared $4.15 or nearly 5 per cent yesterday, its biggest one-day gain in 10 months, after US data showed an unexpected 3.9 million-barrel drop in crude stocks last week, most of it at the Cushing, Oklahoma, delivery point.
Prices were also buoyed by the Federal Reserve's quarter percentage point interest rate cut, its second to stave off fears of a recession, moves that have added liquidity to financial markets, some of which has been ploughed in oil.
Oil prices have surged more than 50 per cent since the start of the year, and they have risen about 18 per cent in the past month alone on winter supply worries, speculative buying and a succession of record lows in the US dollar.
However, Opec continues to resist calls for more oil as it blames speculation and politics for the rise.