LONDON, March 7: Oil prices hit a record high $106.54 per barrel on Friday as investment funds ploughed into the market following fresh economic evidence pointing towards a US recession, traders said.

Prices were also buoyed by the falling US currency, falling US crude reserves and Opec’s decision earlier this week to maintain current output levels.

New York’s main oil contract, light sweet crude for delivery in April, reached the historic level in late afternoon trade, topping the previous record of $105.97 that was set on Thursday.

At the same time, London’s Brent North Sea crude for April delivery hit a record $103.98 on Friday, beating the previous high of 103 that was set in earlier deals.

Analysts said many investors sold their dollar and equity holdings in favour of commodities as they sought a safer investment amid more bad news on the state of the faltering US economy.

“Mainly today it’s more investment fund money coming out of equity markets and into the commodities markets again,” said Sucden analyst Robert Montefusco.

“We had some terrible figures on the US today, and the dollar has been extremely weak. We are probably looking for another big (interest) rate cut from the Federal Reserve again.”—AFP