The UK's Brent crude oil hit a new record high of $53.30 a barrel in London trade on Tuesday.
US petrol prices are expected to hit a new high this year
The increase came amid rising demand for heating oil as cold weather hit the US northeast, while a weaker dollar encouraged speculative fund buying.
Forecasts that oil demand from China will grow by 33% more than previously thought also weighed on sentiment.
Brent crude later eased to $52.84 a barrel, up 75 cents, while in New York, light crude was up 70 cents at $54.59.
The price of Brent crude for delivery in April beat a previous high of $53 a barrel set last Thursday.
The price hikes came as the dollar fell to less than $1.33 per euro.
Weakness in the greenback often leads to higher oil demand and prices because it lowers the dollar-denominated cost of crude to many consumer nations and funds.
Signs that Opec will not increase output after its meeting in Iran next week also helped keep prices high.
Petrol price rises
On Tuesday US crude futures traded above the $55 a barrel level.
They settled below the record level of $55.17 a barrel reached last October but still remain more than 40% up on a year ago.
Soaring demand from China and concerns that global demand will outstrip production has helped push the price of oil up.
And the markets were concerned by comments from the US Energy Information Administration (EIA), which said an expected drop in Chinese demand for fuel to run power generators has not taken place.
Meanwhile, the EIA said it expects US petrol prices to hit new record highs this spring, reaching an average of $2.15 a gallon.
It also upped its forecast for world oil demand in the second quarter of the year, adding that prices are set to stay near the mid-to-high $40 a barrel level this year and could move higher in 2006.
"Oil prices are likely to be sensitive to any incremental supply tightness that appears during periods of peak demand worldwide," the EIA noted in its monthly forecast.