Oil set a new record above $115 a barrel today as a drop in US gasoline inventories raised concern of tighter supply and a weak dollar boosted investor demand for commodities.
A US government report last night showed a surprise drop in crude inventories and a larger-than-expected decline in stocks of gasoline. Demand for the motor fuel usually peaks in the summer.
US crude set a record of $115.54 a barrel and by 10.58am was trading at $115.24, up 31 cents. Oil has hit new peaks for three consecutive days. London Brent set a record of $113.38.
London's gas oil, the benchmark for heating oil and diesel in Europe, set the pace for crude oil and refined product futures, gaining 1.1 per cent to $1,056.25 a tonne.
In the latest indication of strong demand for middle distillates, China's top refiners were set to extend unusually high imports into a sixth straight month.
PetroChina, China's second-largest refiner, has bought 300,000 tonnes of gas oil for May, traders said.
The weakness of the dollar continued to attract investors into commodities to hedge against inflation and bet oil's rally would help compensate for the shrinking value of dollar assets in their portfolios.