LONDON, July 3: The price of oil set a record high above $146 a barrel here on Thursday owing to falling reserves of US crude, simmering tensions over Iran and a weak dollar, traders said.

Brent North Sea oil for August delivery surged to a life-time peak of $146.69 a barrel after breaching $146 for the first time earlier on Thursday.

New York’s main oil contract, light sweet crude for August delivery, leapt to an all-time pinnacle of $145.85 on Thursday.

“Prices rose to set new all-time highs ... supported by a decline in US crude oil inventories,” said Barclays Capital analyst Kevin Norrish.

After hitting new heights, Brent crude stood at $145.13 a barrel in electronic deals, up 87 cents from Wednesday’s close as traders banked profits.

New York crude was 28 cents higher at $143.85.

Oil prices, which have doubled in value over the past year, were driven by news that American crude stockpiles fell by 2.0 million barrels to stand at 299.8 million barrels in the week to June 27.

The US government’s Energy Information Administration had also revealed on Wednesday that crude inventories were 15.3 percent lower than at the same stage one year ago.

“It was the first time inventory fell below the psychologically critical 300-million-barrel threshold since January,” said PetroMatrix analyst Olivier Jakob.

The latest record-breaking price surge also came after Iranian Oil Minister Gholam Hossein Nozari said that Iran would react fiercely to any military attack against it.—AFP