The price of light sweet crude oil pushed above $98 a barrel for the first time on Wednesday and was poised to cross the landmark $100 threshold, driven by worries about a winter fuel crunch.
Prices touched a record $98.62 during intraday trading on the New York Mercantile Exchange before pulling back to the $96 range.
The ease in prices stemmed from new government data showing supply, while tight, isn't stretched as thin as initially expected. The report said crude supplies fell by 800,000 barrels the end of last week, half the 1.6 million barrel decline analysts had forecast.
The drop in oil inventories is spooking financial markets because of reluctance by OPEC — supplier of about 40 percent of the globe's crude — to pump more fuel despite the approaching winter.
And reports of lower-than-expected production from non-OPEC countries are only further exacerbating the market's distress.
Consequently, consumers' frustrations are pouring out at the pump, where prices are again topping $3.
The national average price of a gallon of gas rose 1.9 cents overnight to $3.043, according to AAA and the Oil Price Information Service. Prices are up nearly 29 cents since mid-October and are 85 cents higher than a year ago.