NYMEX crude back up, hits new high on weak dollar

NEW YORK, March 12 (Reuters) - U.S. crude oil futures shifted higher to hit a new high midday on Wednesday, buoyed by a weaker dollar which tends to encourage buying to hedge against an economic slowdown.

The recovery offset an earlier slide sparked by fresh government data that showed crude and gasoline inventories stocks rose last week by a wider margin than had been forecast.

On the New York Mercantile Exchange at 12:25 p.m. EDT (1625 GMT), April crude CLJ8 was up 87 cents, or 0.8 percent, at $108.62 barrel, trading from $107.09 to $109.85, which toppled the previous record of $109.72 set on Tuesday.

In London, April Brent crude LCOJ8 was up 99 cents, or 0.94 percent, at $106.24 a barrel, trading $104 to $106.39, a record high.

"The crude oil uptrend is so strong it will not die easily," said Tom Bentz, an analyst at BNP Paribas Commodity Futures Inc in New York, who added the weak dollar was the support that had prevented crude futures from falling deeper after the latest inventory data.

Some market-watchers said they also saw some short covering pushing up prices as some traders scrambled to cover positions following NYMEX's move on Tuesday to raise margins for crude oil and related futures contracts.

The dollar tumbled to a record low against the euro. [USD/]

The greenback rallied a day ago after the Fed said it would lend primary dealers $200 billion in Treasury securities and accept a wider array of mortgage debt as collateral to ease tight credit conditions.

The U.S. Energy Information Administration said that for the week to March 7, domestic crude stocks rose 6.2 million barrels to 311.6 million barrels, rebounding after a surprise drawdown the week before. [EIA/S]