Oil prices crept toward the $127 level in Asian trade this morning as traders predicted costlier crude despite Saudi Arabia's disclosure that it had boosted production.
New York's main oil futures contract, light sweet crude for June delivery, rose 62 cents to $126.91 per barrel.
The benchmark contract had peaked at a record $127.98 on Friday before settling at an all-time closing high of $126.29.
London's Brent crude contract for July rose 29 cents to $125.28 a barrel, after settling at $124.99 on Friday. It had earlier climbed to an all-time high of $126.34.
David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney, said in a report that oil prices were bolstered by further US dollar weakness and "analysts further revising higher their oil price forecasts."
Saudi Arabia is the biggest producer in the 13-nation Organization of the Petroleum Exporting Countries (OPEC), which pumps 40 per cent of the world's oil.
Iran, another major producer, said on Saturday that any output hike by OPEC as requested by the United States would not affect prices.
The US dollar lost ground to most other major currencies on Friday after fresh data renewed concerns over the world's biggest economy and energy consumer. A weaker US currency makes dollar-priced crude more affordable for holders of stronger currencies.