Oil set a record above $115 a barrel on Thursday as a drop in US gasoline inventories raised concern of tighter supply and a weak dollar boosted investor demand for commodities. A US government report on Wednesday showed a surprise drop in crude inventories and a larger-than-expected decline in stocks of gasoline. Demand for the motor fuel usually peaks in the summer. US crude set a record of $115.54 a barrel and by 0958 GMT was trading at $115.24, up 31 cents. Oil has hit new peaks for three consecutive days. London Brent set a record of $113.38. London's gas oil, the benchmark for heating oil and diesel in Europe, set the pace for crude oil and refined product futures, gaining 1.1 percent to $1,056.25 a ton. In the latest indication of strong demand for middle distillates, China's top refiners were set to extend unusually high imports into a sixth straight month. PetroChina, China's second-largest refiner, has bought 300,000 tons of gas oil for May, traders said. The weakness of the dollar continued to attract investors into commodities to hedge against inflation and bet oil's rally would help compensate for the shrinking value of dollar assets in their portfolios. The euro hit a record high against the dollar on Thursday. The dollar hit $1.5982 in late-morning European trading, sending it past its previous high of $1.5978, set Wednesday. The dollar has been weighed down by a combination of gloomy US economic data and high European inflation - fueling expectations that the U.S. Federal Reserve will continue cutting its interest rates while the European Central Bank leaves the cost of borrowing unchanged. The euro got a cold shower later Thursday. __
