Oil prices surged over $101 a barrel this evening, close to a record high, as investors reacted to weakness in the US dollar following a batch of gloomy economic data.
Strong heating fuel demand in Europe and the US in the midst of a cold spell and signals from OPEC that the group will not raise production at its meeting next week added support to crude's rally.
US crude gained $1.76 to $101.11 a barrel, bringing it 21 cents below last week's all-time high. London Brent crude rose $1.98 to a record $99.67.
The dollar tumbled after reports showed US consumer confidence slumped to its worst in five years while inflation soared among producers. A weak dollar often triggers strong buying of commodities such as oil.
Oil's gains added to a 42-cent rise on Monday as cold weather hit parts of Europe and low temperatures lingered over the northern US states following a mild start to winter.
Energy traders have also been cautiously eyeing signals from OPEC ahead of the group's meeting on March 5. OPEC's president said its members would agree not to raise production, in part because of fears of a demand slowdown. 'I can tell you they are not going to increase production because there are plenty of stocks,' OPEC president Chakib Khelil said.
