Oil prices soared to a record high close to 106 dollars a barrel on Thursday as traders were spooked by a small explosion in New York, a surprise fall in US crude stockpiles and the weak US currency.

New York's main oil contract, light sweet crude for delivery in April hit 105.97 dollars per barrel, surging above 105 dollars after topping the previous record of 104.95 dollars set on Wednesday.

Brent North Sea crude for April jumped to 102.95 dollars, beating its previous all-time peak of 102.29 dollars set on Monday.

A small explosion struck a military recruiting station in New York's Times Square in the early hours of Thursday, causing minor damage and disruption but no injuries, police said.

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"The spike (in prices) may have been a bullish, knee-jerk reaction to that (news)," said Societe Generale analyst Mike Wittner.

The blast occurred shortly before 0900 GMT and shattered windows and buckled the door of the small booth, a frequent focus of anti-war demonstrations and one of the most public faces of the US military.

Police said only that the explosion was the result of an improvised explosive device, while local reports quoted a witness as saying a passer-by had thrown an explosive device. Police would not confirm the account.

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