By Santosh Menon
US crude rises to over $102 a barrel as commodity prices rise on lacklustre US economic data.
Oil powered to a new record above $102 a barrel on Wednesday, closing in on its inflation-adjusted peak, as a slumping dollar on lacklustre US economic data triggered a surge across commodities markets.
US crude stood 67 cents higher at $101.51 a barrel by 0925 GMT, off its latest highs of $102.08 but still edging closer to the inflation-adjusted peak of $102.53 seen in 1980.
London Brent crude climbed 64 cents to $100.14 a barrel, after earlier hitting a record of $100.30.
The dollar extended losses to fall to fresh record lows against the euro and two-week lows against the yen after reports showed US consumer confidence at its lowest in five years.
A weak dollar can sometimes trigger commodities buying as investors seek to preserve their nominal value in other currencies.
Most commodities markets pushed higher on Wednesday with gold hitting a new record and copper, aluminium and silver hovering near multi-year peaks.
Investors view these metals as a hedge against the dollar and an alternative to other financial markets.
Oil has also lately been supported by growing winter fuel demand in the US and Europe amid falling temperatures, and indications from Opec that the exporter group will not increase production at its meeting next week.
"[Opec] appears reluctant to heed requests from Western leaders to add more barrels to the market in order to soften prices and appears to be heading for an unchanged scenario when it meets next Wednesday," said Robert Laughlin at MF Global.
On Tuesday, Opec's president said members would agree not to raise production, in part because of fears of a demand slowdown.
In the US, crude oil supplies are forecast to have risen last week by 2.5 million barrels, the seventh increase in a row, as refineries undergoing maintenance have built up stocks.
A poll of industry analysts by newswire Reuters predicted US distillates stocks, including heating oil and diesel, would maintain their seasonal decline, down 2.1 million barrels, due to cold temperatures and a dip in production and imports.
The US government data is due at 1530 GMT on Wednesday. (Reuters)