June 6 (Bloomberg) -- Crude oil rose for a second day in New York as the dollar headed for a weekly loss against the euro, making commodities attractive as a hedge.

Investors looking to compensate for the dollar's drop have helped push oil, gold and corn to records this year. The dollar fell after European Central Bank President Jean-Claude Trichet said yesterday rates may rise next month. Chevron Corp. workers in Nigeria have threatened to strike over working conditions, the Vanguard newspaper reported.

``The market is pushing up and wants to go higher,'' said Barbara Lambrecht, an analyst at Commerzbank AG in Frankfurt. ``Right now we have this inverse correlation between the dollar and oil prices.''

Crude oil for July delivery rose as much as $2, or 1.6 percent, to $129.79 a barrel in electronic trading on the New York Mercantile Exchange. It was at $129.49 at 9:57 a.m. London time. Futures reached a record $135.09 a barrel on May 22 and are up 96 percent from a year earlier.

Yesterday, oil gained $5.49, or 4.5 percent, to $127.79 a barrel. It was the biggest one-day gain since March 26.

Morgan Stanley, the second-biggest U.S. securities firm, said current shipping patterns suggested that U.S. benchmark West Texas Intermediate crude may reach $150 a barrel by July 4.

Middle East oil shipments are similar to the end of the third quarter last year, when Morgan Stanley had predicted an ``oil price spike'' based on projections of inventory draws in the Atlantic Basin, Ole Slorer, the bank's analyst wrote in a research note today on commodity shipping.

Dollar Trends Lower

Brent crude oil for July settlement rose as much as $1.69, or 1.3 percent, to $129.23 a barrel on London's ICE Futures Europe exchange. It was at $128.90 a barrel at 9:58 a.m. London time. It gained $5.44, or 4.5 percent, to settle at $127.54 a barrel yesterday, the biggest single-day gain since Dec. 12. Prices reached a record $135.14 on May 22.

The dollar traded at $1.5599 per euro at 9:36 a.m. in London from $1.5593 yesterday when it fell 1 percent, the most since April 16. It closed at $1.5554 last week. The yen traded at 106.12 per dollar from 105.94 yesterday, when it touched a three-month low of 106.43. It fell 0.6 percent this week.

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

Last Updated: June 6, 2008 05:00 EDT