NEW YORK - Gasoline and oil prices extended their record-setting streaks Wednesday, with gasoline at the pump reaching a new high of nearly $3.25 and crude surpassing $110 for the first time.
The gains came as a weakening dollar led investors to shrug off an Energy Department report that crude oil and gasoline supplies rose last week.
The national average price of a gallon of regular rose by 1.9 cents overnight to $3.246, a new record, according to AAA and the Oil Price Information Service. Pump prices are following crude's recent surge, and could rise as high as $3.75 a gallon this spring, analysts have said.
Meanwhile, light, sweet crude for April delivery rose $1.17 to settle at a record $109.92 a barrel on the New York Mercantile Exchange after earlier rising to a new trading record of $110.20.
The dollar weakened throughout the day Wednesday, setting a number of new lows against the euro and attracting new buyers to the oil market. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak. Many analysts believe the dollar's decline is the reason crude futures have surged to new records in 12 of the past 13 sessions, even though crude supplies have risen 10.2 percent since early January.
For consumers also facing rising food prices and a drop in housing values, the dollar-fed oil rally means more pain at the pump. Analysts see little reason for the dollar to stop falling, or for oil and gas prices to stop rising, any time soon.
The dollar is falling partly in anticipation of another interest rate reduction by the Federal Reserve next week. Lower rates tend to weaken the dollar.
The crude-supply increase was the eighth in nine weeks, putting oil inventories back on a growth track after a one-week decline. Meanwhile, forecasters including the Energy Department consistently have reduced their demand growth predictions for this year.
