Oil prices leapt to fresh records Wednesday with London prices crossing $US144 a barrel as the US dollar weakened and data revealed a drop in stockpiles of US crude.
Brent North Sea crude oil for August delivery surged as high as $US144.65 a barrel before settling at $US144.26, up $US3.59.
New York's main oil futures contract, light sweet crude for August, pushed to an intraday record of 143.91 dollars before closing at $US143.57 dollars, up $US2.60. In after-hours trade, New York crude swung as high as $US144.15 per barrel.
The US Energy Information Administration said on Wednesday that stockpiles of crude had fallen by two million barrels in the week to June 27, accelerating the gains in the futures market.
A weak US dollar also helped push prices higher, since oil is quoted in the US currency. The dollar was down against most currencies, pushing the euro to $US1.5883 in New York trade.
Phil Flynn at Alaron Trading said oil continued to gain momentum amid worries about the global economy, the dollar and other ills.
"Oil is a proxy for everything and an accurate reflection of our deep-seated fears and all of our insecurities," Flynn said.
"It is also a reflection of a commodity that is in tight supply and one that will still have value if the rest of the financial world comes crumbling down around us. You can call it speculation if you wish but that does not do the free marketplace justice."
Amid falling inventories, OPEC secretary general Abdallah el-Badri said in an interview published Wednesday that US authorities should stop pressing the organisation's member nations to pump more crude.
"As the world's major power, I want them to stop harassing OPEC countries," he told the Spanish newspaper El Pais, when asked about a move by the US Congress to allow the Justice Department to sue OPEC members for conspiring to restrict supplies or drive up prices.
He also argued that sky-high oil prices were not due to "the myth" of the lack of supplies - as Western nations contend - but to speculation sparked by the subprime home loan crisis in the United States.
"In reality, it's all quite simple to explain: the sub-prime crisis last summer in the United States had a bad effect on stock markets. Investors are looking for other (financial) products and commodities have become the most attractive for speculation," el-Badri said.
Oil prices had hit record highs on Monday owing to tensions over oil producers Iran and Nigeria, and as the dollar remained weak against other major currencies.
Traders on Wednesday eyed simmering tensions over key crude producer Iran amid speculation that Israel might be planning a military strike against the country's nuclear sites.
Iranian Oil Minister Gholam Hossein Nozari said Wednesday that Iran would react "fiercely" to any attack against it, which he warned would cause radically higher crude prices.
"Iran, if there were any kind of activity of any sort, is not going to be quiet and would react fiercely," he told reporters on the sidelines of the World Petroleum Congress in Madrid, when asked what Tehran would do in the event of an attack.