market price

oil prices touched an all-time high of $92 a barrel as the dollar slumped against other major currencies and fears grew for the health of the world economy.Crude futures hit the record level in New York, before dropping slightly to $91.10 a barrel, amid concerns about growing tension between the US and Iran, and a lack of US stockpiles.London's Brent crude rose 87 cents to $88.35, having hit an all-time peak of $89.30 in early trading.

Traders said that with the oil price having risen by $30 in the past year there was little preventing it hitting the talismanic $100 figure. "Now that oil is in the 90s, it is much easier to reach 100 dollars. Anything can happen in this market," said Astmax fund manager Tetsumari.

The commodity's increase came as the dollar dropped in value again, with markets increasingly expecting the Federal Reserve to cut US interest rates again due to the country's severe housing slump. It left the pound a quarter of a cent higher against the greenback at $2.0523 – a three-month high. Remarkably, given its increase against the dollar, the pound was weaker overall on the day, since a number of economists expect the Bank of England to follow the Fed's lead in the coming weeks and cut UK borrowing costs.

In early European trade, the euro struck 1.4375 dollars – the highest level since the single currency's creation in 1999.

Motoring organisations warned that petrol prices would soon increase. The spike in oil prices is largely due to the situation in Iran, which this week became the subject of further sanctions from the US due to fears that it is trying to develop nuclear weapons.

Traders are also concerned about Turkey's plans to launch military strikes against rebel Kurd bases in northern Iraq.

To add to the tension, the US Energy Information Administration said this week that stockpiles of crude had plunged by 5.3m barrels last week. The market had been expecting an increase.