Crude oil prices turned slightly higher in early afternoon Asian trade this morning despite a forecast for slower energy demand growth.
New York's main oil futures contract, light sweet crude for June delivery, rose 15 cents to $125.95 per barrel.
Yesterday at the New York Mercantile Exchange, the benchmark contract jumped to a record $126.98 before settling at $125.80. The contract had risen $1.57 at the close.
Brent North Sea crude for June delivery gained 16 cents to $124.26 a barrel, after closing at $124.10 last night in London.
Crude oil prices have more than doubled in the past year and rocketed about 25 per cent since the start of 2008, when they broke the $100 barrier.
The latest price spike followed a fall earlier yesterday after the International Energy Agency (IEA), energy policy adviser to major industrialised countries, cut its forecast for growth in global oil demand.
Paris-based IEA forecast in a monthly report that crude oil demand in 2008 would stand at 86.8 million barrels per day (bpd), 1.2 per cent more than last year but about 390,000 bpd less than a previous estimate given in April.
The energy monitoring agency also said it now estimated world oil demand in 2007 at 85.8 million bpd, an increase of 1.1 million bpd or 1.3 per cent on the 2006 figure but 150,000 barrels less than the April estimate.
Along with an inflow of investor funds, analysts have cited a variety of factors for this year's price spikes, including rising energy demand from Asian powerhouse economies China and India, and OPEC's refusal to pump more crude.
Agencies