April 16 (Bloomberg) -- Oil rose to a record above $114 a barrel in New York for a second day as the dollar plunged to an all-time low against the euro.

The appeal of oil and other commodities as hedging instruments grew as the dollar sank as low as $1.5968 versus the euro. Oil is also gaining on demand from China, the world's second-biggest crude consumer, where the economy expanded 10.6 percent in the first quarter, government statistics showed today.

``This bull market has got a long way to run,'' Puru Saxena, Chief Executive Officer of Puru Saxena Ltd., said in a television interview. ``We have severe supply-and-demand imbalances all across the commodities complex, whether it's food, base metals, precious metals, energy.''

Crude oil for May delivery advanced as much as 71 cents, or 0.6 percent, to $114.50 a barrel, the highest since futures began trading on the New York Mercantile Exchange in 1983. It traded for $114.17 at 11:20 a.m. London time.

Brent crude for June settlement rose to a record, climbing 85 cents, or 0.8 percent, to $112.16 on London's ICE Futures Europe exchange. It was at $111.96 at 11:25 a.m. local time.

Gasoline and gasoil also increased to records. Gasoline for May delivery gained 1.40 cents to $2.895 a gallon in New York, while in London gasoil, the European version of heating oil, rallied $16 to $1055.75 a metric ton.

Haven

Oil in New York surged 79 percent in the past year as the Standard & Poor's 500 Index dropped 8.5 percent and the Dow Jones Industrial Average declined 2.3 percent. The UBS Bloomberg Constant Maturity Commodity Index, which tracks 26 raw materials was at 1510.882 today, up 36 percent from a year ago.

PetroChina Co., China's biggest oil producer, will buy 50 percent more diesel in May than in April to meet fuel demand in the country. China's imports of diesel jumped 49 percent in March while crude purchases climbed 25 percent.

``In the short run this rally hasn't come to an end,'' said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. ``We still see crude as a safe haven as supply is having problems keeping up with the pace of demand.''

A U.S. Energy Department report today is forecast to show that the country's gasoline inventories dropped 1.8 million barrels last week, according to the median of 16 responses in a Bloomberg News survey. Crude-oil supplies advanced 1.8 million barrels, the survey showed.

To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net;

Last Updated: April 16, 2008 06:53 EDT