Crude futures crossed $140 for the first time on Thursday following the price prediction made by Chakib Khelil, the Algerian Energy Minister and president of Opec.
New York's main oil futures contract, light sweet crude for August, was at $141.37 dollars, up $1.33.
"Crude oil futures made fresh record highs, with higher oil prices fuelling inflationary fears and thus hurting stock markets, which in turn triggered a further rally in commodities as investors seek better returns," Michael Davies, a futures analyst with Sucden in London, said.
Prices "continued to be buoyed by the dollar as the greenback continues its free fall descent this week," he said.
The cost of oil has doubled in a year, with some blaming the surge on Opec for not increasing output.
However Opec, which produces 40 per cent of the world's oil, says speculators are responsible for pushing up crude in reaction to a falling dollar and tensions in oil-producing countries, such as Iran, Iraq and Nigeria.
A weak US currency makes oil priced in dollars cheaper for foreign buyers, thus pushing up demand for the commodity.
Oil prices have risen rapidly over the past six-years, driven by increasing demand from fast-growing economies like China and India.
An oil price poll by the Reuters news agency showed that analysts expect oil will rise for the foreseeable future. The poll showed that US crude in 2008 would average $113.24 a barrel, up by about $6 from the last poll in May.
Rising fuel costs have strained economies and spurred protests around the world, prompting Saudi Arabia, the world's leading oil producer, to pledge to increase output at a meeting between producer and consumer nations over the weekend.
Oil prices had fallen on Wednesday after US government data showed a rise in its crude oil stocks.