Crude oil climbed above $98 a barrel for the first time and gold headed past $US840 an ounce and bound for a new high.

A combination of demand, short covering and supply factors pushed oil higher, while a new low for the US dollar against the euro again added upward pressure to the prices of both gold and oil.

But despite lower oil stocks in the US, oil sank to under $US96 a barrel on selling by funds taking profits, and gold eased from around $US842 to finish a little lower at $US835 an ounce.

A storm disrupting output in the North Sea and fears of a third weekly decline in US oil stocks, helped push oil prices above $98 a barrel in after hours trading in Nymex. The stock figures came and were a bit of an ati climax as sellers appeared around $US98 and then $US97 a barrel.

BP and ConocoPhillips evacuated oil rig workers, adding to supply concern before a U.S. Energy Department report that may show inventories fell for a third week. The dollar slumped on expectations the U.S. Federal Reserve may cut interest rates, boosting commodities prices in the currency.

December crude oil jumped as much as $US1.33 a barrel to $US98.03 in after-hours electronic trading, the highest since trading began in 1983. It eased back to $US97.85 Oil prices have climbed an incredible 66% in the past year.

On Tuesday oil jumped $US2.72 to settle at $US96.70 a barrel, a record close.

Gold soared by more than $US13 an ounce to hit $836.70 an ounce in after hours trading in Asia, that's another 27 year high. Silver jumped as well. Both metals then firmed in Europe and the US before easing.

The US dollar weakened to $1.4666 per euro, and the Aussie dollar climbed past 93 USc again.

Dealers said reaching the $US100 a barrel mark might be a little tough.

In the US petrol topped $US3 a gallon this week, which is not a period of peak demand. Petrol in the UK though isn't as high as it should be because oil prices in local currency terms, is only up 50%.

The disruption in the North sea could go away very quickly, relieving pressure on prices, but traders say some non trade investors have been caught shorting oil and have had to scramble to cover their positions as the price climbed above $US95 a barrel. If the North Sea cuts stay in place and other tensions remain, oil may reach $US100 by the end of the week.

The US Energy Information Administration has highlighted the risk to winter supply on Tuesday saying stocks in industrialized nations would drop some 20 million barrels below the five-year average by the end of this year amid solid demand and continued caps on output from OPEC.

That’s a warning that the International Energy Agency has also been making now for some months and made again will make in a new study of future demand in a day or so.

The EIA, which is part of the US Department of Energy, also raised its forecast for US oil prices in 2008 to near $US80 a barrel from its prior projection of $US73.50.

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