Lone trader 'seeking fame' caused $100-a-barrel oil surge bringing misery for millions of motorists

The buyer, who was trading on his own money bought 1,000 barrels of crude oil from a colleague, which is the minimum allowed.

Strangely, he then sold then back almost immediately, making a loss of $600. The move left industry insiders questioning the reasons behind the deal.

Stephen Schork, a former trader at Nymex and editor of the oil market Schork Report told the Financial Times: "A local trader just spent about $600 in a trading loss to buy the right to tell his grandchildren he was the one who did it.

"Probably he is framing right now the print reflecting the trade," he added.

The move has heaped pressure on the Bank of England for another cut in interest rates next week.

As a result of the record high in oil prices, consumers now face soaring fuel bills, while their spending is being squeezed by higher mortgage payments and rising energy bills.

High fuel prices have a dramatic knock-on effort across the whole economy, raising the price of food and other essentials as manufacturers of everything from food to electrical goods face higher bills for electricity, transportation and raw materials.

With continuing violence in Nigeria and Algeria, both major oil producing nations, cold weather sweeping the US and low stocks of oil in some parts of the world, the price is set to remain high for some time.

Lehman Brothers predicts an average price of $84 through 2008. Goldman Sachs says it will average $95 a barrel but could reach $105 by the end of the year.

There was more misery predicted for motorists too today with petrol prices hitting a record high in Britain.

The cost of each visit to the petrol station has risen by £7.36 since this time last year, it has ben revealed.

It means that the £5 gallon - once unthinkable - is now within reach in the UK.

The milestone is particularly bad news for British drivers, who from yesterday faced paying a new high of 103.3p for a litre of petrol.

This beat the previous record of 102.92p, which was set on Boxing Day.

The AA said that diesel now costs 107.95p a litre - just off the record 108p set on December 6 last year.

When prices hit £1.10 a litre, it will mean fuel is selling at more than £5 a gallon.

Paul Watters, head of public affairs at the AA, said: "The start of the year shows little relief for motorists. We had hoped that petrol and diesel prices had hit a plateau."

Yesterday's record petrol prices in the UK mean filling a typical 50-litre (11 gallon) tank now costs £7.36 more than a year ago. It also puts up the transport costs of businesses.

But this misery for the UK's 33million motorists means Gordon Brown will see his coffers swell from booming oil tax revenues.

The Treasury also takes about 66p from every pound spent at the pumps.

Fuel protesters and petrol retailers said Mr Brown should abandon two planned fuel duty rises of around 2p a litre - which they predict could lead to protests in the spring.

The fuel price rises are also likely to spell bad news for the economy as costs and prices rise. Previous increases have already hampered the Bank of England's efforts to keep a lid on inflation.

High energy prices create inflationary pressures which could reduce the Bank's scope to ease interest rates. This would then have an adverse effect on mortgage repayments.

The rising cost of oil also poses a major threat to international economies which are already suffering from the global credit crunch.

The U.S. crude oil price soared by more than $4 in New York trading yesterday - a huge leap caused by fears that violence in Africa will disrupt production. In London, tradshowsing of North Sea crude also hit a record, jumping more than $3 to $97 a barrel.

Ray Holloway of the Petrol Retailers' Association said: "The Government had already enjoyed a £4billion windfall. It should remove the existing 2p a litre rise and scrap the next two rises it's planning."