NEW YORK-- Oil surged to new highs Wednesday, piercing $115 a barrel as the dollar crashed to new lows and U.S. inventories fell sharply as the world's top consumer gears up for the summer driving season.

U.S. crude settled up $1.14 at $114.93 a barrel after hitting a peak of $115.07. Brent crude rose $1.08 to settle at $112.66 a barrel, off an all-time peak of $112.79 hit earlier.

U.S. crude stocks fell 2.3 million barrels in the week to April 11, countering analyst forecasts for a build, while gasoline stocks showed a draw of over 5 million barrels, the U.S. Energy Information Administration reported.

The draws came as refiners cut runs to 81.4 percent of capacity — the lowest level since October 2005 after hurricanes flooded Gulf Coast plants — as high crude prices cut into profit margins.

"The refinery utilization number is exactly where refiners want it to be -- poor gasoline economics has prompted refineries to go slow on production. They are also looking at product demand numbers, which are not strong," said Tim Evans, energy analyst at Citigroup Futures Research.

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U.S. gasoline demand has been hit by surging fuel costs and analysts are forecasting record pump prices for U.S. motorists taking to the roads for vacation this summer.

Heating oil stocks rose by 100,000 barrels last week, according to the EIA, as warmer weather hit much of the United States, prompting a bout of profit-taking in early afternoon activity.

The slumping U.S. dollar, which plumbed new lows against the euro Wednesday, has also supported oil's record rally by boosting non-U.S. spending power and attracting investors seeking an inflation hedge.

"The dominant factor continues to be the U.S. dollar and I expect this to continue for a while," said Gerard Rigby, an analyst at Sydney-based Fuel First Consulting.

"Whenever you get any kind of good economic news out of the (United States) at the moment, the dollar will rise and oil falls, and the other way around, you get a new oil record."

Oil prices have quintupled since 2002 as surging demand, particularly from developing Asian economies like China, outpaces new supply.

Support this week has also come from London's ICE gas oil futures, the benchmark for heating oil and diesel in Europe, which have traded $1,000 a tonne for much of April.

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