LONDON (Reuters) - Oil stormed towards $99 a barrel on Wednesday, closing in on a triple-digit all-time high, driven by a slumping U.S. dollar and concern about a fuel supply crunch heading into the peak demand winter season.The surge brings oil within a hair of the inflation-adjusted record peak of $101.70 hit in 1980 when war between OPEC producers Iran and Iraq ignited an oil supply crisis.But this time round, demand -- fuelled by exploding growth in China and a steady increase from the United States -- has been a major drive behind a more-than-quadrupling in the oil price since 2002.Analysts said it was only a matter of time before oil hits the landmark level, with evidence of tightening stocks aiding a nearly 8 percent rise over the past two weeks alone."We are going to get $100 before too long," said Kevin Norrish of Barclays Capital.U.S. crude rose $1.55 by 4:55 a.m. EST to $98.25 having earlier hit a record $98.62.London Brent crude also hit a new peak of $95.19, and was later up $1.63 at $94.89 a barrel.Oil gained momentum on Wednesday after the U.S. dollar hit an all-time low against the euro, as global credit market turmoil kept expectations of another Federal Reserve rate cut alive.Investors bracing for more fallout from the U.S. subprime mortgage crisis and seeking shelter from the sliding U.S. dollar have driven oil nearly $30 higher since mid-August and lifted other commodities including gold, now at a 28-year high.And weekly U.S. inventory report due later on Wednesday is expected to show crude stocks in the world's biggest energy consumer had fallen 900,000 barrels last week due to disruptions to Mexican exports, a Reuters poll found.The U.S. Energy Information Administration (EIA) flagged the risk to winter supply on Tuesday, saying stocks in industrialized nations would drop some 20 million barrels below the five-year average by the end of this year amid robust demand and continued caps on output from producer-group OPEC.The Organization of the Petroleum Exporting countries, source of more than a third of the world's oil, has agreed to raise production by 500,000 bpd from November 1 and shrugged off calls to expand on that, blaming the rally on speculators and politics.(Reporting by Peg Mackey, additional reporting by Jonathan Leff in Singapore)
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