Oil prices have doubled from $50 a barrel in January 2007

US light, sweet crude traded at $99.45 in early New York trade, while London Brent crude hit its own peak of $98.26 before easing to $97.70.

Some analysts questioned the validity of the record as it emerged that it was the result of one tiny, lone trade.

But an Indonesian Opec official warned that oil prices could rise above $100.

Opec output

Indonesia's Opec governor said that oil prices could climb to the $100-$110 level and added that the cartel might decide to increase output at its 1 February meeting in Vienna if supply was insufficient.

But fellow Opec members Libya and Qatar said the cartel was powerless to halt the rally.

US crude touched $100 a barrel on Wednesday, beating the previous peak of $99.29 set in November 2007.

Violence in Nigeria, Algeria and Pakistan and the threat of cold weather have all raised prices since the new year break.

The weak dollar has also made oil cheaper to buy for holders of other currencies.

Overpaying

Stephen Schork, a former floor trader on the New York Mercantile Exchange and the editor of an oil-market newsletter, said the record price was the result of a single trader seeking his one minute of fame.

Mr Schork said one floor trader bought 1,000 barrels, the smallest amount permitted, and sold it immediately for $99.40 at a $600 loss.

"They absolutely overpaid," he told BBC Radio 4's Today programme.

"He paid $600 for the right to tell his grandchildren that he was the first in the world to buy $100 oil."

Stocks fall

The rise in oil prompted a drop in shares and a surge in gold prices.

Data on US crude stockpiles is due later on Thursday

The US benchmark stock index, the Dow Jones, closed down 220.9 points, or 1.7%, at 13,044.0.

Asian and European stocks also fell, with Hong Kong's Hang Seng Index ending down 2.44% and Britain's FTSE down 0.1% in early trade.

There are concerns that the high price of oil will stoke price pressures at a time when many central banks are trying to cut interest rates to stimulate growth.

"It's going to have a huge impact on overall global inflation," said Steve Rowles, a commodities strategist with CFC Seymour securities in Hong Kong.

US reserves

Despite oil hitting $100 a barrel, the White House said it would not open up the nation's emergency crude reserves to bring down prices.

Oil prices have doubled from $50 a barrel in January 2007

Oil traders were waiting for the release of weekly US petroleum supply data later in the day, and some expected crude futures to rise above the $100-a-barrel level if the government reported crude inventories fell by more than expected, analysts said.

"We're so close to $100 right now," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

"If the US inventory report indeed shows stock draws, and particularly bigger than expected draws, plus a heightening of geopolitical risks and a falling US dollar, all these factors could push pricing beyond $100," he said.