Oil prices surged more than $3 to a record above $132 a barrel on Wednesday after US data revealed a sharp drop in fuel inventories.

US crude was trading $2.82 a barrel higher at $131.80 by 1504 GMT, just off a new high of $132.08. London Brent gained $3.56 to $131.40.

Weekly data from the U.S. government showed stocks of crude had fallen by 5.4 million barrels.

Gasoline inventories slipped by 800,000 barrels and distillate stocks, which include heating oil and diesel, rose by 700,000 barrels, less than analyst expectations for a 1.3 million barrel increase.

"The market is in a very bullish mood and these statistics will do nothing to change that," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.

The fall in weekly inventories is matched by concerns supply problems will continue for years, which have driven records on oil to be delivered far into the future as well as in the near term.

Oil for delivery in 2016 rose above $142 a barrel on Wednesday.

Investors have also been drawn into the market by a weak U.S. currency, which has made dollar-denominated commodities relatively cheap for holders of other currencies.

The dollar slid to a one-month low against the euro on Wednesday, which was pushed upwards by expectations of higher euro zone interest rates.

Speaking to Reuters during a visit to Venezuela, OPEC Secretary General Abdullah al-Badri said the soft dollar was one of the factors that could keep pushing oil higher.

The Organization of the Petroleum Exporting Countries (Opec) has kept official policy unchanged, but its biggest producer Saudi Arabia has raised production and other members have overcome problems that had reduced supplies.

Tanker tracker Petrologistics said on Wednesday Opec's oil output in May had risen by 700,000 barrels per day (bpd) compared with April.

The market has viewed the extra crude as insignificant compared with chronic underinvestment and refinery shortfalls. - Reuters