The price of oil set a record high above $146 a barrel earlier today, with traders blaming falling reserves of US crude, tensions over Iran and a weak US dollar.
Meanwhile, Russian energy giant Gazprom forecast that oil would 'very soon' hit $250 a barrel.
Brent North Sea oil surged to a life-time peak of $146.69, before easing back to $145.13 up 87 cents from Wednesday's close. US crude leapt to an all-time peak of $145.85, and this evening stood 28 cents higher at $143.85.
Oil prices, which have doubled in value over the past year, were driven by news that American crude stockpiles fell by two million barrels in the week to June 27.
The latest record-breaking price surge also came after Iranian Oil Minister Gholam Hossein Nozari said that Iran would react fiercely to any military attack against the oil exporter. The OPEC oil exporting group added that it would be difficult to replace Iranian crude output should the country face attack.
The oil market also found support from the struggling US currency, which makes dollar-priced commodities cheaper for foreign buyers and tends to encourage demand.
Meanwhile, Gazprom chief executive Alexei Miller made his $250 prediction to journalists on a visit to Azerbaijan. Mr Miller also said he expected Russia's oil production to level off in the next few years. He also said that European consumers would face higher gas prices by the end of the year. Russia is the world's second-biggest producer and exporter of oil after Saudi Arabia.