Oil leaped more than 1 percent on Thursday, briefly topping $96 for the first time and extending the previous day's 5 percent jump after an unexpected sharp fall in U.S. crude stocks and data showing strong economic growth.
The rise toward oil's inflation-adjusted peak of $101.70 from April 1980 was also supported by U.S. dollar weakness after a Federal Reserve interest rate cut, and Qatar's oil minister reiterated that the roaring market was beyond OPEC's control.
U.S. oil for December delivery rose as high as $96.24 a barrel in electronic trade. By 3:39 a.m. EDT it was up 86 cents at $95.39 a barrel, paring some gains. December Brent crude also hit its record high of $91.63, up $1 on the day.
Oil soared $4.15 or nearly 5 percent on Wednesday, its biggest one-day gain in 10 months, after U.S. data showed an unexpected 3.9 million-barrel drop in crude stocks last week, most of it at the Cushing, Oklahoma, delivery point.
The U.S. inventory report has reaffirmed the belief that market conditions are tightening and oil prices are ratcheting up higher on that basis, said David Moore, a resource analyst at the Commonwealth Bank of Australia (CBA).
Prices were also buoyed by the Federal Reserve's quarter percentage point interest rate cut, its second to stave off fears of a recession, moves that have added liquidity to financial markets, some of which has been ploughed in oil.
Oil prices have surged more than 50 percent since the start of the year, and have risen about 18 percent in the past month alone on winter supply worries, speculative buying and a succession of record lows in the U.S. dollar.
Prices are now nearing their highest even when adjusted for inflation, but the economy of the world's biggest energy consumer has shown surprising resilience to high oil prices, growing at a brisk clip in the third quarter.
U.S. GDP expanded at a 3.9 percent annual rate last quarter, the quickest pace since the first quarter of 2006, while private employers added 106,000 jobs in October, beating economists' forecast of 60,000 new jobs, data showed
However, OPEC continues to resist calls for more oil as it blames speculation and politics for the rise.
The question is if there is any shortage in the supply. There is no ... shortage in crude oil, Qatar Oil Minister Abdullah al-Attiyah told reporters in Tokyo on Thursday.
It's market-driven and the market is out of our control, he said, reiterating comments made earlier this week.
And Iran said OPEC was not expected to discuss raising output at informal talks in Riyadh in mid-November.
I doubt that because there is enough oil in the market ... Iran does not see a need for an output increase, Iran's acting oil minister Gholamhossein Nozari told Reuters, when asked if OPEC would discuss increasing production in the Saudi capital.
Analysts saw little standing in the way of a run at $100, particularly with geopolitical factors again on the rise.
Iran warned the United States on Wednesday it would find itself in a quagmire deeper than Iraq if it attacked the Islamic state, and Russia intensified efforts for a diplomatic solution to Tehran's nuclear row with the West
It's just a matter of time... Everything you see now are bullish factors, so there is no reason for you to sell at the moment, said Ken Hasegawa, commodity derivatives sales manager of Fimat Japan Inc.
(Additional reporting by Jiwon Chung in Singapore)