The surging price of oil reached another milestone yesterday, jumping to an inflation adjusted record high of US$103.95.

The weaker dollar that has propelled oil and other commodities prices higher sent light, sweet crude for April delivery past US$103.76 a barrel on the New York Mercantile Exchange.

That is the level many analysts consider to be the true record high for oil after its $38 barrel price from 1980 is translated into 2008 dollars.

The price later traded up US$1.81 at US$103.65, fluctuating with the normal ebb and flow of trading.

Oil's most recent run into record territory has been driven by the dollar's slump against other world currencies.

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 falling.

Gold, copper and wheat are among the other commodities that have rallied in recent weeks as the dollar has fallen.

"It's coming down to another commodity price rally," said Phil Flynn, an analyst at Alaron Trading Corp in Chicago.

The dollar has been weighed down by concerns about the US economy and the Federal Reserve's interest rate-cutting campaign.

Lower interest rates tend to weaken the dollar, which fell Monday to a new low of $1.5275 against the euro.

- AP