Crude oil prices rose on Tuesday above $100 a barrel to set a new record before falling slightly on speculation that the Organization of Petroleum Exporting Countries may diminish oil output next month and after an explosion shut off operations in a U.S. refinery.
OPEC may reduce production when it meets on March 5, according to investors' forecasts. Iran's oil minister Gholam Hossein Nozari noted over the weekend that OPEC usually reduces output at the start of the second quarter
Crude oil for March delivery rose $4.51, or 4.7 percent, to settle at $100.01 a barrel at 2:55 p.m. on the New York Mercantile Exchange.
Earlier on Tuesday, prices reached a new record of $100.10 a barrel surpassing by 1 cent the previous record on January 3. Brent crude for April climbed $3.62 or 3.80 percent to $98.73 a barrel on London's ICE Futures Exchange., beating the previous record of $98.50 on January 3.
Gasoline prices climbed after news that Alon USA Energy Inc.'s refinery in Big Spring, Texas was shut down on Monday due to an explosion. The incident harmed five workers, from which one had serious burns and was hospitalized.
The vice president of the refinery, which produces 70,000 barrels a day, said he expected operations to be interrupted for weeks, according to reports.
In general, energy prices were strong on the NYMEX. Gasoline futures surged $11.34 or 4.55 percent to $2.6072 a gallon and March heating oil surged $10.41 or 3.93 percent to $2.7510 a gallon.
Recently OPEC and the International Energy Agency have cut demand forecasts for this year supporting worries about crude's demand.
Crude prices also climbed as investors turned to energy and metals on a falling dollar. U.S currency declined against the euro to $1.4734 compared to $1.4658 on Monday.