REUTERS, LONDON - Oil was near $145 a barrel on Friday, close to record highs reached in the previous session when traders bought into the market ahead of a holiday weekend in the United States.

US crude oil was down 44 cents at $144.85 a barrel, by 5:12 am EDT, below an all-time high of $145.85 hit on Thursday. The contract has risen more than 50 percent this year.
 
London Brent was down 21 cents to $145.87.
 
Investors have rushed into crude oil ahead of the US independence day holiday on July 4, because they are wary of any escalation in tensions between Iran and Israel that have contributed to oil's rise to a record of $145.85 this week.
 
Oil has risen about 50 percent this year, driven partly by the tensions over Iran's nuclear program, plus expectations that global oil supplies will not be able to cope in the long term with strong demand growth from newly industrializing China and India.
The price spike has caused fuel protests worldwide and has begun to dampen demand in consuming nations, including the United States, the world's biggest energy consumer.
 
The next milestone is $150 a barrel, which some analysts had predicted the market could reach by July 4.
 
"It's going to go higher before it goes lower," said Christopher Bellew, of Bache Financial.
 
"Two trains are rushing towards each other. One is ... rallying oil prices and the other is economic recession. At some point they're going to collide."
 
Investment flows into oil have contributed to the price surge, encouraged by commodities' strong returns this year versus a feeble showing from equities.
 
"I think the current market is driven by speculative money, not by fundamentals," said Takeda Makoto, an analyst at Bansei Securities.
 
Saudi Oil Minister Ali al-Naimi reiterated his belief that the current oil rally was driven by speculators rather than any shortage of crude oil. He repeated promises that Saudi Arabia would pump more oil if there was demand.
 
Venezuelan President Hugo Chavez said that a price of $100 per barrel for oil is "more than enough".
 
"If it were up to us, $100 per barrel would be more than enough, but it's not our fault," Chavez said during a televised address.
 
The weak US dollar has also played a part in boosting oil, which is priced in the US currency.
 
The dollar drew some support on Friday after European Central Bank President Jean-Claude Trichet appeared to play down chances of further interest rate rises.

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