Oil rise sees prices touch $111

The cost of petrol is soaring around the world as oil prices rise

Oil prices rose to fresh highs for the seventh trading day in a row as the rush to assets considered safer than the falling dollar continued.

US crude gained more than $1 to touch $111 a barrel, before falling back slightly to close at $110.33, while Brent finished at $107.88.

Investors are putting cash into oil and commodities like gold as a refuge from the dollar and volatile world stocks.

Oil prices rose despite US data showing a surprise rise in crude inventories.

'Intrinsic value'

A report from the US Energy Department's Energy Information Administration showed that US crude supplies rose 6.2 million barrels last week, more than three times the amount expected.

Petrol stocks were also higher than forecast.

Meanwhile, EIA analysts have predicted that oil demand will slow as the US economy, the world's largest oil guzzler, runs out of steam.

And Opec, the group of nations responsible for 40% of the world's oil exports, has echoed this view, refusing to increase output.

"Oil and other commodities have an intrinsic value to the extent that the US dollar depreciates, (oil) becomes relatively cheaper in terms of other currencies, such as the euro," said David Moore, a commodity strategist with the Commonwealth Bank of Australia.

"So you get an adjustment to compensate for that effect."