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NEW YORK - Oil hit an all-time high above $97 per barrel on fears of a supply crunch ahead, while lingering credit fears pushed the dollar down to a record low against the euro.

U.S. stocks advanced, led by shares of energy giants such as Exxon Mobile Corp, and Treasury prices slipped, though concern about more credit losses at financial firms continued to lend some safe-haven support.

In the oil market, U.S. crude settled up $2.72 at $96.70 a barrel after hitting an all-time high of $97.10. A weaker dollar and U.S. government warnings about a winter supply squeeze in consumer nations helped push prices higher.

"Rising oil consumption and the realization that additional OPEC production may not be sufficient to arrest the inventory decline are keeping markets firm," the Energy Information Administration said in its monthly short-term energy outlook.

On Wall Street, energy giant Exxon Mobil led the way higher, gaining 3.1 percent to $90.38.

The Dow Jones industrial average jumped 117.54 points, or 0.87 percent, to end at 13,660.94. The Standard & Poor's 500 Index was up 18.10 points, or 1.20 percent, to finish unofficially at 1,520.27. The Nasdaq Composite Index was up 30.00 points, or 1.07 percent, to close unofficially at 2,825.18.

The FTSEurofirst 300 index gained 0.3 percent, helped by gains in mining shares, but financials were again weaker as investors treated the sector with suspicion following Citigroup's warning on Monday that it may write off $11 billion in subprime mortgage losses on top of a $6.5 billion write-down last quarter.

Some analysts said high energy costs and lingering concern about more loan losses on Wall Street were keeping traders cautious.

"If people start noticing going into the Christmas season they're going to have to spend more at the pump, it might not be a good thing," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets in Baltimore, Maryland.

"I think you're going to continue to see weakness in the financials until we get a sense the subprime and loan debacle at all of these money-center banks and brokerage firms has run its course," Schrader said.