Oil prices came close to breaching the $100 a barrel mark on Wednesday as the dollar remained weak, tempting traders towards commodities.
Oil prices are creeping closer to $100 a barrel
US light, sweet crude hit a record of $99.29 before slipping back to $97.29, down 74 cents on the days trading.
Brent crude, which hit an all-time high of $96.53 dollars, rose 50 cents to $95.99 a barrel.
Tight supplies and winter demand have also contributed to oil prices climbing by about 45% since August.
US crude oil inventories fell by 1.1 million barrels last week, the US Energy Information Administration said, surprising analysts who had predicted a rise of 600,000 barrels.
Federal Reserve predictions of slower than expected growth in the US next year have also boosted prices.
Analysts examining minutes from the Federal Reserve's latest rate-setting meeting, released on Tuesday, said there was a good chance that there would be another interest rate cut in December.
This would be expected to weaken the dollar further as commodities and other currencies and became more attractive to investors, forcing up oil prices, they said.
"Oil prices have every reason to rise," said Koo Ja-kown, crude analyst at Korea National Oil Corp (KNOC).
"Speculative money is coming into the market as the dollar is weakening. On top of that, there are supply concerns for winter fuel."
Oil prices had already risen on Monday and Tuesday, after leaders of producers' cartel Opec decided not to increase production at their latest meeting.
Traders will be carefully watching Wednesday's weekly crude inventory data, released in the US by the Energy Information Administration.
Adjusting for inflation, US light crude's record peak of $101.70 came in 1980 against a backdrop of war between Iraq and Iran.