Oil prices steadied near $111 a barrel Thursday after jumping to a new record in the previous session on an unexpected drop in U.S. crude inventories. It rose as high as $112.21 a barrel during Wednesday’s session, surpassing the previous trading record of $111.80 set last month.

Analysts expect demand for gasoline and oil to fall further as prices rise. Theoretically, that should bring prices down. But so far this year, prices have shown little inclination to fall in response to eroding demand. With gasoline supplies shrinking and the Northern Hemisphere summer approaching - when demand will be stronger than it is now - consumers may have to wait until later in the year for price relief.

Also supporting oil prices was the release of a gloomy report by the International Monetary Fund Wednesday that said the U.S. is headed for a recession, dragging world economic growth down along with it. The IMF had slashed growth projections for the United States in its report.

Moreover, Financial market interprets grim news as indications that the U.S. Federal Reserve will further cut interest rates, which would drive the U.S. dollar down. A weaker dollar attracts financial investors to oil and other commodities as a hedge against inflation, which may further support crude prices to touch highs, never seen before.