Oil tops $145 ahead of U.S. holiday

By Rebekah Kebede

NEW YORK (Reuters) - Oil hit a record above $145 a barrel on Thursday ahead of the Independence Day holiday weekend in the United States before paring gains as the dollar recovered from a two-month low.

U.S. light sweet crude oil for August delivery was trading at $144.35 a barrel, up 78 cents at 6:52 p.m. British time after earlier hitting a record $145.85. London Brent was trading $1.03 higher at $145.29 after reaching $146.69 a barrel.

"We pushed to a new high early and then backed off from that on some light profit-taking ahead of the long weekend that was encouraged by the strength that we've seen in the U.S. dollar," said Tim Evans, energy analyst for Citi Futures Perspective in New York.

U.S. payroll data released Thursday suggested the job market had not deteriorated as much as many investors had feared, helping the dollar recover from a two-month low against the euro hit earlier in the day.

Comments from the head of the European Central Bank that suggested further interest rate increases in Europe could be put on hold also supported the greenback.

Oil has risen nearly 13 percent since the start of June on concerns about Middle East tensions, tight supplies and investors buying crude as a hedge against inflation and the falling value of the dollar.

Saudi Oil Minister Ali al-Naimi reiterated his belief on Thursday that the current rally in oil prices was being propelled by speculators rather than any shortage of crude oil.

Naimi repeated promises that Saudi Arabia would pump more oil if there was demand for it.