Strong demand for oil and the continuing weakness of the dollar meant prices remained high.

A barrel of US light crude touched $103.05 during the day, but at the end of floor trading in New York, the price settled at $101.72.

London Brent crude was down 69 cents at $100.21 a barrel.

Demand for oil and other commodities is high among investors because of fears of a recession in the US.

Oil prices fell back from their peaks as Turkey withdrew troops from northern Iraq after the end of a campaign against Kurdish separatists.

Traders said this had slightly relieved geo-political tension, another reason why oil prices have been rising.

But Venezuelan President Hugo Chavez predicted oil prices would continue to increase.

"Everything indicates that the oil price will continue to get stronger," Mr Chavez said.

'Inflation fears'

"The fresh record prices coincides with the flow of investor money into commodities, due to the weak US dollar and the increasing threats of inflation in the US," said Victor Shum, senior principal at Purvin and Gertz energy consultants in Singapore.

A Nigerian government official said that if oil prices remained around record highs, producers' cartel Opec was unlikely to reduce output at its meeting next week.

Fears over the US economy have grown further after Federal Reserve boss Ben Bernanke said on Thursday that maintaining growth was becoming more difficult.

Mr Bernanke said the Fed's job of encouraging growth was harder than in 2001, when the US suffered a recession, because of rising inflation and energy prices.