Oil futures jump to record over $US115

Crude futures have made their first foray past $US115 per barrel, propelled to a new record by concerns about how much petrol will be available during the peak summer months.

Inventories of petrol fell by 5.5 million barrels last week, according to the Energy Department's Energy Information Administration, a much bigger decline than forecast by analysts surveyed by Dow Jones Newswires. Light, sweet crude for May delivery responded by rising as high as $US115.07 on the New York Mercantile Exchange Wednesday, and later settled up $US1.14 at a record $US114.93 a barrel.

The report said crude inventories fell by 2.3 million barrels last week, compared to the gain analysts expected.

Oil prices were also boosted by the falling dollar, which declined to a new low against the euro on Wednesday. Many investors buy commodities such as oil as a hedge against inflation and a falling greenback. A weaker dollar also makes oil cheaper to investors overseas.

But the market was torn and traded sharply lower at times due to data deeper in the report showing that the country's appetite for increasingly expensive gas is declining.

"Demand for gasoline is terrible," said Phil Flynn, an analyst at Alaron Trading Corp in Chicago. Gas demand has fallen an average of 1 per cent each of the last four weeks compared to the same period last year. "Demand should be rising this time of year," he said.

Still, May petrol futures rose 5.8 cents to settle at a record $US2.939 a gallon on the Nymex after earlier rising to a trading record of $US2.9427.

The EIA report also said inventories of distillates, which include heating oil and diesel, unexpectedly rose last week by about 100,000 barrels. Analysts had expected a sharp decline. May heating oil futures rose 0.91 cent to settle at $US3.283 a gallon.

Demand for gasoline has been falling for months as consumers reacted to a series of price records by driving less.

Gas and diesel prices are following crude futures, which have risen from about $US64 a barrel last spring in the US, mostly because of the falling dollar. Prices also have been supported in recent months by a view that demand for oil remains strong globally, although it may be falling in the United States. But that could change, if US demand continues to weaken, analysts say.

"We're seeing a major slowdown in US demand growth," Flynn said.

In other Nymex trading, May natural gas futures rose 22.8 cents to settle at $US10.433 per 1,000 cubic feet.

In London, June Brent crude futures rose $US1.08 to settle at $US112.66 a barrel on the ICE Futures exchange.