The price of oil per barrel has rocketed 16% this year
Crude oil prices rose to a record high of $111.80 (70.98) a barrel on Monday 12 March.
The price of light, sweet crude for April delivery hit the record price in early electronic trading on the New York Mercantile Exchange, before slipping back to $110.30.
The surge came as markets around the world slumped in the wake of the rescue of US investment bank Bear Stearns. The value of the US dollar also slumped to a new low against the euro, persuading investors to shift money from currencies into oil, which has added to the price pressure.
'Investors seem to be just following the mantra of buying oil and commodities to hedge against the falling dollar and inflation,' Victor Shum, energy analyst with Purvin & Gertz in Singapore, says.
'While we have new records for oil almost daily now, we're also seeing daily new record lows for the dollar.'
Oil prices have risen about 16% this year and more than $20 dollars in the past month. Oil prices broke the $100 mark on January 2.
New York's main contract, light sweet crude for April delivery fell to $108.30 dollars a barrel on Tuesday 18 March at the close of US trades. London's Brent North Sea crude for May delivery fell $1.11 dollars to $104.45