Oil prices surged to another record peak near $127 a barrel this evening after OPEC producer Iran said it was studying a plan to cut output.
US crude jumped $1.77 to $126 a barrel, having earlier struck a record $126.98. London Brent crude rose $1.10 to $124.01 a barrel.
Iran's president Mahmoud Ahmadinejad, quoted by one of the country's news agencies, said a proposal to reduce Iran's crude output was being reviewed by experts.
Oil rallied back after closing lower on Monday when data showed a decline in oil imports by China in April, the first year-on-year drop in 18 months, raising further questions about demand growth forecasts.
The International Energy Agency on Tuesday said record-high oil prices will slow global oil demand growth this year to 1.03 million barrels per day (bpd), 230,000 bpd less than its previous forecast.
