The price of crude oil has reached $146 per barrel, a record high.
A favoured indicator of world economic performance, its price is expected to rise further today and add to business costs and fuel bills.
The European Central Bank (ECB) is poised to raise interest rates past four per cent, a move analysts have claimed will send prices even higher.
Russian president, Dmitry Medvedev, has suggested they will pass $150 a barrel. He explained: "Unfortunately, rising oil prices create problems for the world’s economy."
A weak US dollar, concerns over supply, increased demand and political instability all lend to higher oil prices.
Traders in the City of London have seen the US dollar fall to near a two month low against the euro.
Despite inviting significant investment from the Middle East, the City has bore the brunt of falling commercial property values.
Toby Hassall, research analyst at Commodity Warrants Australia, told Bloomberg euro rates could affect oil prices.
"If the ECB raises rates, we’ll see more weakness in the dollar and upward pressure on US denominated commodities such as crude," he commented.