Crude oil futures shot to another record high Tuesday, as new buyers looked past mixed projections on petroleum demand to participate in the upward momentum of the past few weeks.

Light, sweet crude for April delivery settled 85 cents, or 0.8 per cent, higher at US$108.75 a barrel on the New York Mercantile Exchange, after jumping to a record intraday high of US$109.72 a barrel overnight.

In London, Brent crude on the ICE futures exchange settled up $1.09 at US$105.25 a barrel.

Nymex futures traded in a range of more than $3 throughout the session, as the factors that have in the past fueled crude's ascent this year were inconclusive Tuesday.

The dollar's weakness has fueled much of oil's recent run-up, as investment funds seek a hedge in hard assets. But, on Tuesday, the dollar strengthened after the Federal Reserve announced measures to add liquidity to financial markets in an attempt to soften the credit crunch.

The International Energy Agency on Tuesday slightly cut its projections for world oil demand this year, which it now sees at 87.5 million barrels a day, up 2.0 per cent from 2007.

Separately, the Energy Information Administration said Tuesday it expects a slowing economy and record-high oil prices to hold US oil demand growth to just 40,000 barrels a day in 2008, bringing daily consumption to 20.74 million barrels.

Market participants said the market seemed driven by players seeking to capitalise on the momentum that has carried oil futures up more than $20 in the last month.

- AP