Oil prices hit a record high USD 107.44 on Monday as the White House announced that US Vice President Dick Cheney will head to OPEC kingpin Saudi Arabia next week to seek increased production.
Dealers said oil had fallen in early trade on profit-taking but concerns over the weakness of the dollar and tightening supplies provided support and news of the Cheney trip then added an extra twist.
The New York contract for April delivery hit a record USD 106.54 per barrel on Friday.
The latest spike came as the White House said today that Cheney would next week urge Saudi Arabia to push OPEC to boost output in an effort to rein in sky-high prices.
"I'm sure that energy issues will come up," spokeswoman Dana Perino said in a preview of Cheney's trip to the Middle East next week. "Obviously we want to see an increase in production."
The Organisation of the Petroleum Exporting Countries (OPEC), which produces 40 per cent of the world's crude, decided at a policy meeting last week to maintain its daily production target of 29.67 million barrels despite calls by US President George W Bush for it to do more.
OPEC blamed the high cost of crude on speculative buying as investors sought a hedge against a weakening dollar and rising inflation.
The weak US currency, which fell to a new low of 1.5464 against the euro on Friday, encourages demand for dollar-priced commodities like oil because it makes them cheaper for buyers using other currencies.