Analysts say speculators are buying oil to hedge against the lower dollar

US light, sweet crude jumped to $103.95 a barrel, before giving back some gains to trade at $102.45. London Brent also climbed to a record, hitting $102.

Analysts blamed the falling dollar, which makes oil an attractive investment to speculators.

It also looks increasingly unlikely that oil exporters' cartel Opec will raise production to help ease prices.

Speculators

Analysts said that oil is likely to track movements in the currency markets.

"There is no top in sight yet for crude futures because hedge funds are looking at how far the US dollar will fall," said Phil Flynn of Alaron Trading in Chicago.

"They are buying commodities to hedge against inflation because hanging on to the dollar means they lose value," he added.

Opec has blamed speculators for driving oil prices higher and is unlikely to raise production when it meets in Vienna this week.

"I don't think Opec would consider increasing production because then we would be increasing to meet demand that doesn't exist," said Opec President Chakib Khelil.

Other commodities, including copper and gold have also been surging higher as the dollar has fallen.

US gold prices closed $9.20 higher at $984.20 an ounce.

At one stage in the session the price hit a record $992.00 an ounce.