An extraordinary $5-a-barrel spike in the price of oil has sent crude to all-time highs, smashing through $135 a barrel amid forecasts that prices are on the way above $150 and may even hit $200.

In international trading room scenes not seen since the first Gulf War, the price surge came in a matter of hours, heaping more turmoil on a global economy already hobbled by the credit crisis.

The spike was variously blamed on speculators continuing to plunge into the oil futures market, surprisingly low levels of reserves in the US for its consumer markets and the continuing weakness of the dollar, which today fell around another half-cent against the euro and the pound.

What it will mean for the global economy is all-time high petrol prices, soaring domestic energy prices on the back of rising linked gas prices, and industry suffering under increased costs - not least the airlines, with major carriers like British Airways and American Airlines signalling higher fares, fewer flights and job cuts.

On the Nymex exchange in New York crude for delivery in July was being priced at $135.04 a barrel. Brent crude traded on the London market rose $1.80, or 1.4%, to a record $134.50 a barrel.

Crude has risen by 50% since January, by more than 20% this month alone and by $11 a barrel in the past seven days. In 10 of the last 14 trading sessions, oil has hit new records.

Peter Hitchens, oil analyst at Seymour Pierce, said the market was being pushed up by supply fears.

"There are suggestions that supply isn't keeping up with demand. The market is very, very frightened about the lack of spare capacity and any potential disruption causes a sharp movement of the oil price.

"The fundamentals are not quite as scary as the oil price says but it is fear over supply. The market is driven by fear."

The price rocketed late last night after traders in New York apparently took fright at an unexpected drop in stockpiles in the US, fanning the fears of some experts like the Texas oil billion-aire and legendary industry commentator T Boone Pickens, who claim that high prices are here to stay.

"Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87 million. It's just that simple," he said this week as prices hit new highs.

That runs counter to the arguments of Opec, the Saudi Arabia-led oil cartel, which claims it is producing enough to satisfy world demand.

With diesel prices in parts of rural Britain already over 130p a litre, experts predict petrol at the pump in the UK will average more than 120p a litre this summer. Economists at Grant Thornton say if oil prices reach $140 a barrel the average price of petrol will be 121p a litre, up from the current all-time high average of 113p.

Hauliers and motoring organisations are predicting a summer of woe for motorists, with the Government under intense pressure to drop fuel taxes.