Wall Street plunged Thursday, as investors contended with bad news, including another surge in oil prices. (Richard Drew/Associated Press)

The price of oil traded up more than $5 US on Thursday after Libya hinted at a production cut and the head of OPEC said prices could top $150 a barrel this year.

On the New York Mercantile Exchange, light sweet crude for August delivery rose $5.09 to settle at $139.64.

Earlier, oil hit an intraday peak of $140.39. That marked the first time the near-month contract for oil had surpassed $140. The previous near-month record high was $139.89 for the July contract, reached on June 16.

The price rise came as Canadian banks identified major changes in U.S. driving habits because of high gas prices.

Canadian Imperial Bank of Commerce economists Jeff Rubin and Benjamin Tal said in a report Thursday that there will be 10 million fewer vehicles on U.S. roads by 2012.

Some Americans will stop driving because oil will hit $200 a barrel by 2010, they said, which could drive the pump price to $7 a gallon, from the current $4.

Even at $4, Americans are shifting their car purchases, said Bank of Nova Scotia economist Carlos Gomes.

"With Americans increasingly buying small cars, this segment became the largest in the United States last month, surpassing both mid-size cars and pickup trucks," he wrote in an auto industry report.

Small cars now account for a quarter of U.S. sales, up from one-sixth last year, he said.

OPEC comments push price

Oil shot up on comments from Chakib Khelil, president of the Organization of the Petroleum Exporting Countries, who said he thinks the price for crude could rise to between $150 and $170 a barrel this summer. He said he sees prices declining after that, and doesn't think oil will hit $200.

Adding to oil's rise was a statement from Shokri Ghanem, the head of Libya's national oil company, who said the country might cut crude production. According to reports, Ghanem said he believes oil markets are well-supplied.

"[Ghanem], the nation's top oil official, declined to say when a decision would be made on whether to lower production, or give any indication of the size of the cut under consideration," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn.

With files from the Associated Press