OIL surged to a new record high of nearly US$140 a barrel yesterday, propelled by weakness in the dollar which offset the bearish impact of plans by Saudi Arabia to boost output.

US light, sweet crude for July delivery was up US$3.74 at US$138.60 a barrel by 1317 GMT, after falling as much as US$1.40 a barrel, or about 1 percent, earlier. US crude set a record high of US$139.89 a barrel. London Brent crude was up US$3.05 at US$138.16. Prices leapt as the dollar fell after data showed manufacturing in New York state contracted in June for the fourth time in five months.