Crude oil prices rose above a record US$99 per barrel in overnight electronic trading, pushed higher by fears of a lack of supply.
Adding to the supply worries, data released by the U.S. government on Wednesday show oil supplies in that country fell unexpectedly last week.
For the week ending Nov. 16, crude oil inventories fell by 1.1 million barrels compared to the previous week, the U.S. Energy Department's Energy Information Administration said in its weekly report.
Gasoline supplies did rise but slower than expected.
Patricia Mohr, vice-president of industry and commodity research for Bank of Nova Scotia, told CTV.ca that oil prices could reach US$100 per barrel as early as today.
She said the weaker than expected figures could result in traders pushing "the price up over the $100 mark" today.
Mohr said there is a perception globally that supplies of crude oil have tightened.
"There are a lot of political and technical challenges in bringing on stream new oil supplies," she said. "I think that the pace of new oil supply development has been a lot slower than expected."
Light, sweet crude for January delivery peaked at $99.29 a barrel in electronic overnight trading but was down Wednesday afternoon on the New York Mercantile Exchange -- trading at $97.93 a barrel.
Meanwhile, the Canadian dollar fell 0.94 cents to 101.03 cents US at mid-morning. The drop came despite the U.S. greenback reaching a record low against the euro.
The loonie's downturn follows a report released Tuesday indicating that Canada's annual inflation rate has eased -- which could pave the way for an interest rate cut.
"If you think the Bank of Canada is going to ease rates, it might be a reason for the Canadian dollar to move down," said Mohr.
Statistics Canada measured the October inflation rate at 2.4 per cent, compared to 2.5 per cent in September.
