OIL rose yesterday to a record close, bolstered by the weaker dollar and supply disruptions ahead of the US summer gasoline season.

The US greenback slipped on worries about the gloomy economic outlook for the world's top consumer, boosting oil and other dollar-denominated commodities purchased as a hedge against inflation.

US crude oil futures settled up US$1.62 at US$111.76 a barrel, the highest settlement on record and near the intraday high of US$112.21 hit last Wednesday.

London Brent crude rose US$1.09 to settle at US$109.84 a barrel, after reaching an all-time high of US$110.01 in earlier trading activity.

A supply disruption in Nigeria as well as the temporary shutdown of the Capline pipeline, which carries crude from the US Gulf Coast to the Midwest, also supported prices. The US branch of Royal Dutch Shell said operations along the line were restored after the Friday fire.

A fire caused by sabotage at the Eni's Beniboye oil flow station in Nigeria caused the loss of 5,000 barrels per day (bpd) of oil.

"There were some supply issues over the weekend with the Capline leak and the issue with Nigeria," said Mike Zarembski, senior commodities analyst for optionsXpress in Chicago.

"Gasoline is soaring to new highs plus the dollar is still very weak."

US gasoline futures hit fresh highs yesterday as the United States gears up for the summer driving season, when demand traditionally peaks.

The growing US economic problems and high energy prices are hurting demand in the giant economy, and the government now forecasts summer use could drop for the first time in 17
years.

OPEC's head of petroleum market analysis on Saturday told the International Monetary Fund's steering committee that global demand appeared to be softening but added high prices were not driven by supply shortages.

"Oil market fundamentals point to a market which is currently well supplied and the balance is expected to soften further due to lower seasonal demand in the coming months," Mohammad Alipour-Jeddi said in a statement.