Mumbai: Crude oil surged nearly 5 per cent to hit a record above $100 a barrel on expectations of supply shortfalls following OPEC's decision not to hike output despite the high prices.

US crude was up $4.51 at $100.01 a barrel after hitting $100.10 a barrel. London Brent crude settled up $3.65 at $98.56 a barrel.

News of the death of Nigerian rebel leader Henry Okah also raised sully fears, although a government spokesman later said he was alive and in custody.

Worries about the economic health of the United States pushed oil off its record peak, but signs that OPEC will hold or even cut output when it meets on March 5 sent prices back to triple digits.

"OPEC should maintain production or cut production," said Venezuelan oil minister Rafael Ramirez.

OPEC president Chakib Khelil also made similar comments yesterday.

While it is difficult to fathom a reduction in supplies at current price levels, a rush of speculative investment in oil and other commodities helped push up prices in the asset class, traders said

Problems at US refineries and tensions between US oil giant Exxon Mobil and Venezuela over the takeover of an oil project last year also aided the sentiment.

A fire at Alon USA Energy's 67,000 barrel per day refinery in Big Spring, Texas shut the plant and officials said they were expecting to partially restart the plant in about two months.

Added to this, seasonal refinery maintenance in the US helped send RBOB gasoline and heating oil futures to record highs in the country.