LONDON (AFP) — Oil prices surged by more than a dollar on Wednesday as traders switched investments away from the weak US currency and into commodities.
Traders were meanwhile awaiting the latest snapshot of crude inventories in the United States, which is the world's biggest consumer of energy.
New York's main oil contract, light sweet crude for delivery in May, jumped by 1.38 dollars to 102.60 dollars per barrel.
London's Brent North Sea crude for May gained 1.24 dollars to 101.84 dollars.
"Oil futures were firmer, extending last night's gains amid persistent weakness in the US dollar and as investors were putting their money back into commodities," Sucden analyst Andrey Kryuchenkov said Wednesday.
"Just as it happened before, the dollar weakness prompted market participants to put their money into dollar denominated commodities, as they become relatively cheaper for foreign investors, while some use commodities as a hedge against inflation," he added.
Later on Wednesday, the US government was to publish energy stockpiles data for last week. Analysts are forecasting that US crude inventories rose by 1.8 million barrels in the week to March 21.
"There could always be a surprise in the stockpiles report, and the market is focusing on that now," said Tony Nunan, of Mitsubishi Corp's international petroleum business in Tokyo.
Although prices were rising Wednesday, they remained far below all-time highs of almost 112 dollars per barrel reached last week.
Oil futures have been supported by long-term concerns over the ability of producers to meet rising energy demand from the developing world, notably China and India.
New York crude had hit a record intra-day high of 111.80 dollars on March 17, while London Brent scored an historic peak of 108.02 dollars earlier this month.
Prices have hit a series of lifetime highs this year on the back of massive demand for oil futures, as investors also seek shelter from choppy stock markets.
The price of oil has doubled since the start of 2007, driven in large part by soaring demand for crude from emerging economic powers.
Speculators have latched onto this, as well as diplomatic friction or unrest affecting oil producing countries such as Iran and Nigeria.
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