U.S. crude oil futures rose on Monday as early dollar weakness fueled commodities buying as a hedge and along with geopolitical tensions helped send crude intraday to a record-high $103.95 a barrel.
The dollar tumbled to lifetime lows against the euro and a basket of major currencies Monday before regaining some lost ground after better-than-expected U.S. manufacturing data.
U.S. light, sweet crude oil for April delivery last traded in the open outcry floor session up 71 cents, or 0.7 percent, at $102.55 a barrel, after an earlier record high of $103.95. The prior record, which was set Friday, was $103.05.
London Brent crude was up $1.62 up at $101.72 a barrel.
"There is no top in sight yet for crude futures because hedge funds are looking at how far the U.S. dollar will fall," said Phil Flynn of Alaron Trading in Chicago.
"They are buying commodities to hedge against inflation because hanging on to the dollar means they lose value."
Speculators on the New York Mercantile Exchange increased net long positions in crude oil futures last week to the highest in seven weeks, according to data from the Commodity Futures Trading Commission released on Friday.
Further support for oil came from signs that members of the Organization of the Petroleum Exporting Countries (OPEC) are not planning to alter output policyat their meeting in Vienna this week.
"It is not a good time for action, it is a time for watching," Libya's top oil official, Shokri Ghanem, told Reuters on Monday, echoing comments by other ministers and officials.
But one OPEC source said the producer group may discuss a small increase of 500,000 barrels a day citing high oil prices, while reiterating that fundamentals in the market did not support an increase in output.
Lower supplies from Iran and Nigeria pushed overall OPEC oil output down in February from January, according to a Reuters survey.
Tensions in the Middle East, South America and Nigeria remain supportive of oil because of their potential to disrupt supply.
OPEC members Venezuela and Ecuador sent troops to their borders with Colombia after Colombia bombed rebels inside Ecuador.
In Nigeria, attackers blew up a police houseboat on Bonny Island, an oil and gas export hub in southern Niger Delta. Tight supplies of heating oil and diesel fuel in Europe also provided some support for oil.