Oil jumped to a peak over $82 a barrel after the U.S Federal Reserve slashed interest rates and elevated concerns of a low winter supply.
Crude jumped as the world's largest oil consuming nation lowered its benchmark interest rate by half a point to 4.75 percent on Tuesday, the first cut in nearly four years.
Crude oil for October delivery rose 94 cents, or 1.2 percent, to settle at $81.51 a barrel at 2:43 p.m. on the New York Mercantile Exchange, a record close. Prices are up 28 percent from a year ago, according to Bloomberg data.
Hurricane and other supply risks, shrinking U.S. fuel inventories and fund flows into energy from poorly performing equity markets have fueled a rally in oil prices in recent months. The Atlantic hurricane season, which lasts from June through November, threatens oil platforms, ports and refineries along the U.S. Gulf of Mexico.
The Organization of the Petroleum Exporting Countries agreed last week to boost output by 500,000 barrels per day (bpd) from November after meeting in Vienna on Sept. 11.
U.S. crude oil supplies are running at their lowest level in eight months while inventories of gasoline are at their lowest since Hurricane Katrina disabled a number of U.S refineries.
Crude-oil supplies dropped 2.03 million barrels from 322.6 million barrels in the week ended Sept. 14, according to data from Bloomberg. Though crude prices have quadrupled since 2002, when adjusted for inflation the price is below the $90 peaks of the Iranian Revolution in 1979.
U.S. gasoline inventories in the week ended Sept. 7 were 5.7 percent lower than the five-year average for the period, the Energy Department said last week. Heating-oil stockpiles were 25 percent below the five-year average.