I hate to perpetuate the media hype, but it is what is driving the markets right now. In early morning trading we have already seen oil prices surg past $143 a barrel for the first time ever, and the price for a gallon of gas hit an all-time high in the United States.

Supply concerns and a fragile global economy continue to drive the price of oil to new highs, as well as continued tensions in the Middle East.

"The main factors behind the rise today are the U.S. dollar remains fragile and geopolitical tensions, particularly surrounding Iran," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney. "That's unsettling for the oil market."

The European Central Bank may raise interest rates at its next meeting on Thursday, a move that would help strengthen the euro against the dollar, Moore said.

Light, sweet crude for August delivery rose $3.46 to $143.67 a barrel in electronic trading on the New York Mercantile Exchange, by midday in Europe. Those prices fell to $142.17, but a barrel was still up $1.96 in early trading.

On Friday, crude futures spiked to a record $142.99 a barrel in New York before closing at $140.21.

At the pump, U.S. gas prices continued to climb, reaching a national average of $4.086 a gallon, according to a survey of stations by AAA, the Oil Price Information Service and Wright Express. Gas prices last hit a record on June 16 when a gallon of gas cost $4.08.

Over the weekend, Iran's Revolutionary Guards warned that Tehran would respond to an attack against it by barraging Israel with missiles and controlling a key oil passageway in the Persian Gulf.

In 2006, Iran's supreme leader, Ayatollah Ali Khamenei, also threatened to disrupt the world's oil supply if the United States attacked Iran. Iran is the world's fourth largest oil producer. About 60 percent of the world's oil passes through the Strait of Hormuz, a narrow outlet for oil tankers leaving the Persian Gulf.

Analysts said daily trading volumes for Nymex oil would probably continue last week's trend and stay on the light side, leading to higher volatility during the trading sessions.

"We would not expect liquidity to be much better this week, as it will be a short trading week due to the July 4 weekend," Olivier Jakob of Petromatrix in Switzerland said in a research note.

Worries about tight oil supplies and growing global demand are also major factors in the doubling of oil prices since last year, Moore said.

The dollar has weakened on expectations the Federal Reserve Board won't soon raise interest rates as the U.S. economy struggles with low growth. The Fed left its benchmark rate unchanged last week.

"ECB President Jean-Claude Trichet's hawkish stance (on) inflation" could mean the dollar may be headed for further weakness against the euro "and that's not bearish for oil," said The Schork Report edited by U.S. analyst and trader Stephen Schork.

A falling U.S. stock market has also led investors to seek higher-yielding investments such as oil and other commodities. The Dow Jones industrial average has fallen to its lowest level in nearly two years -- and is down nearly 20 percent since its peak in October.