Oil prices closed at another record high Thursday in volatile trading as the U.S. dollar fell to new lows against the euro.

The crude oil futures contract for April delivery ended the trading session at $105.47 US a barrel, up 95 cents from Wednesday. At one point earlier in the day, the price hit $105.97 US a barrel.

The U.S. dollar fell to another record low against the euro Thursday, persuading many investors to switch into commodities such as oil.
(Ferdinand Ostrop/ Associated Press)

The drop in U.S. oil supplies, coupled with OPEC's decision on Wednesday not to alter its production quota, were also seen as contributing to crude's rise.

A falling U.S. dollar added to the upward pressure. The greenback touched a new low against the euro on Thursday. That prompted investors to shift money from the U.S. dollar into commodities — like oil.

On Wednesday, oil prices surged $5 a barrel after the U.S. government reported that crude stockpiles fell by 3.1 million barrels to 305.4 million barrels for the week ending Feb. 29. Market analysts had been expecting a rise of 2.1 million barrels.

Pressure also came from the Organization of Petroleum Exporting Countries' action at its meeting in Vienna, where the cartel said Wednesday it wouldn't budge from its current output level.

OPEC members said they expect oil demand to weaken in the second quarter on global economic softness.