Oil hits new record of $97 in N.Y.

NEW YORK, Nov. 6 (AP) - (Kyodo)—(EDS: UPDATING WITH NEW HIGH)

Oil prices set a new high of $97.00 a barrel on a preliminary basis Tuesday morning in New York, aided by the rapid influx of speculative funds into oil and other commodity markets arising from fears that another round of credit crunch might strike U.S. financial markets.

At 10:20 a.m., the benchmark December contract for West Texas Intermediate crude surged $2.53 from the previous day to $96.51, on the New York Mercantile Exchange. The previous high of $96.24 was posted Oct. 31.

Oil was also backed by a weak dollar and speculation that a weekly U.S. government oil report will show a drop in crude oil stocks. The report is due out Wednesday.

On expectations that oil prices will reach the $100 threshold in the near future, investors are actively buying oil, a U.S. investment bank said.