LONDON, May 13: The price of crude oil struck a record high $126.98 a barrel on Tuesday despite expectations of slower demand growth for crude, traders said.

New York crude beat its all-time peak of $126.40, which was reached on Monday.

The price of oil had fallen earlier on Tuesday on profit-taking as the International Energy Agency (IEA) cut its forecast for growth in global demand.

After reaching new heights on Tuesday, New York’s main oil futures contract, light sweet crude for June delivery, stood at $125.94, up $1.71 from Monday’s close.

London’s Brent crude contract for June jumped $1.09 to $124.

“What we’ve seen in this market since August is that any dip is eventually met by a short-covering rally that pushes prices to new highs,” said AG Edwards analyst Eric Wittenauer.

“It is not a surprise to see prices struggle to show any kind of downward trend,” he added.

The Paris-based IEA forecast in a monthly report on Tuesday that crude oil demand in 2008 would stand at 86.8 million barrels per day (bpd) some 390,000 bpd less than previous estimate given in April.

The international agency also said it now estimated world oil demand in 2007 at 85.8 million bpd.

“The IEA has revised its demand forecast further to a growth of only one million bpd for 2008 and warned that further downward revisions could be on the way,” said Petromatrix analyst Olivier Jakob.

“At the start of the year, the IEA was forecasting demand growth of 2.1 million bpd which makes for global demand projections cut in half since the year started.”—AFP