NEW YORK: Crude oil has surged to a fresh record high above $134 per barrel as a surprise drawdown in U.S. crude oil inventories and a weaker dollar prompted heavy fund inflows into the market.

Investment funds flocked into the market based on its strong performance, with key U.S. crude oil having surged more than 20 percent since the start of the month and geopolitical and supply concerns keeping traders reluctant to sell.

Recent bearishness towards the dollar added momentum to the oil market, as the dollar's weakness increases the purchasing power of buyers holding other currencies.

The front-month July NYMEX crude contract was up $1.13 or 0.85 percent at $134.30 on the Globex electronic trading platform as of 0037 GMT after settling up $4.19 or 3.3 percent at $133.17 in New York.

The contract hit a fresh record high of $134.42 after the settlement on Thursday.

"The huge draw in crude inventories was surprising. All focus is on bullish factors. You simply have to follow the trend and buy now," said Tatsuo Kageyama, an analyst at Kanetsu Asset Management in Tokyo.

"You really cannot forecast how much further the market will rally now. All I can say is the market will continue to rise," Kageyama said.

The U.S. Energy Information Administration said that for the week to May 16 domestic crude stocks fell 5.4 million barrels to 320.4 million barrels, against a forecast for a 600,000-barrel build in a Reuters poll of analysts.

U.S. heating oil futures surged to a record high on Thursday, carrying over a bullish trend from the previous day after distillate stocks rose far less than expected last week.


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