NEW YORK (MarketWatch) -- Crude-oil futures rallied to a new closing high above $100 a barrel Wednesday, extending their record-breaking run after minutes confirmed the Federal Reserve's willingness to slash rates further.

Crude oil for March delivery rose 73 cents to finish at a new record closing high of $100.74 a barrel on the New York Mercantile Exchange.

Earlier in the session, the March contract, which expired today, hit a record all-time high of $101.32 a barrel.

"The momentum was with the bulls after yesterday's incredible run," said Phil Flynn, vice president of futures brokerage Alaron Trading.

"The Fed minutes were a reason to buy," Flynn said. "When the market saw that the Fed was still talking about cutting interest rates, that was a cue to buy oil."

Crude for April delivery, the new front-month contract, finished unchanged at $99.70 a barrel.

“ 'The Fed minutes were a reason to buy. When the market saw that the Fed was still talking about cutting interest rates, that was a cue to buy oil.' ” — Phil Flynn, Alaron Trading.

"There was a little bit of a short squeeze in the March contract," Flynn said. "April didn't go along for the ride at the end."

The Federal Reserve confirmed that it is willing to do more to help the economy find its footing, but warned that nagging inflation worries may necessitate swift rate hikes once growth resumes, minutes of the latest meetings released Wednesday show.

This is only the latest version of a bifurcated message the Fed has been delivering to markets since it began cutting interest rates last August: at the same time it has cut rates because of downside risks, the central bank feels compelled to note that the stubbornly high level of inflation cannot be ignored. See The Fed.

On Tuesday, crude oil surged 5% to close above $100 a barrel for the first time, amid speculation about OPEC moves, and after an explosion at a Texas refinery raised concerns about supply.

"It is important to note that in addition to soaring energy prices, we also had explosive rallies in base and precious metals, all this occurring despite a less-than-inspiring U.S. macro backdrop," said Edward Meir, analyst at MF Global, in a research note.

"This tells us that fund money is being channeled into the commodity space on perceptions that these investments will do better over the course of the year," Meir said.

The benchmark gasoline contract rallied more than 4% to a historic high on Tuesday, advancing as a Texas refinery was forced to shut down.

Alon USA Energy Inc. ALJ said Monday's explosion and fire at its Big Spring refinery temporarily suspended production. The company also said it will look into what caused the blast.

"Baffling as the current rise is, it is best to let the rally run its course," Meir said. "Funds may be driving prices higher for now, but such sentiment is fickle and could turn quickly."

Another build in crude stocks expected

The Energy Department will release weekly data on U.S. petroleum inventories on Thursday, a day later than usual because of the Presidents Day holiday.

Analysts surveyed by Platts expect a rise of 3.2 million barrels in crude supplies in the latest week, a build of 1 million barrels in gasoline supplies and a decline of 1.7 million barrels in distillate inventories.

A backlog of barrels caused by a two-day closing of the Houston Ship Channel and Mexican ports should clear and keep crude stocks on a seasonal building trend, Platts said.

Over the past five weeks, crude stocks have increased by more than 18 million barrels, but inventories at Cushing, Okla., the key delivery point for Nymex crude, have actually declined by 597,000 barrels to 17 million barrels, Platts said.

"This latest rally comes against a broad softening of the fundamental outlook for oil prices: inventories are actually continuing their seasonal build pattern, while demand fears quite rightly persist," said James Neale, an analyst at Citigroup, in a note Wednesday.

The latest surge in prices is "driven principally by a sharp uptick in fund flows into oil and other commodities in response to the latest wave of rate cuts by the U.S. Federal Reserve -- a factor which is hard to measure in the near term as data on open interest positions tends to be somewhat backwards looking," Neale said.

Also on Nymex, March reformulated gasoline ended down 1 cent at $2.59 a gallon and March heating oil dropped 1 cent to end at $2.75 a gallon.

March natural gas fell 2 cents to $8.96 per million British thermal units.