Oil steady after record near $124, with bulls in control

"The trading mantra that we observed the last few months between the movement of the U.S. dollar and oil price movements appears not to hold water the last few days," Shum said.

The dollar's protracted decline against the euro and other foreign currencies since the middle of last year has played a major role in oil's rise by attracting investors looking for a hedge against inflation.

When the dollar reverses course and strengthens, the effect usually reverses, sending oil prices lower -but not recently, as Shum noted.

In currency trading Thursday in Asia, the dollar has continued to climb against the euro, which at one point fell to $1.5285, its lowest level since March 11.

"Clearly the current spike in oil prices has been sharp and furious and with little in the way of fresh impetus and lack of supporting fundamentals a retracement must surely be on the cards," said Paul J. Harris, head of natural resources risk management at the Bank of Ireland Global Markets.

"That said, in current conditions it is difficult to call exactly when the bearish elements will prevail. More importantly, the key issue is how far that pullback will be, with oil prices below $100 ... (a barrel) at this stage a dim and distant memory."

In other Nymex trading, June heating oil and gasoline futures fell slightly to $3.4437 and $3.1142 a gallon (3.8 liters.) Natural gas futures rose by more than 4 pennies to $11.369 per 1,000 cubic feet.

In London, June Brent crude futures fell 18 cents to $122.14 a barrel on the ICE Futures exchange.

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AP Business Writer Thomas Hogue contributed to this report from Bangkok, Thailand