"The EIA (inventory) data are bullish in light of expectations," said Kyle Cooper, analyst at IAF Advisors in Houston. "There is nothing in this report that can put a damper on the current rally."

Gasoline prices have soared faster than crude since the start of April as inventories dwindle, while refiners run down stocks ahead of changes to more environmentally-friendly fuels in May.

Refinery maintenance has also eaten into stocks.

Brent has hit fresh records in each of the last seven sessions as the loss of a quarter of Nigerian oil supply has tightened European markets more than the United States., where crude stocks are at their highest level for nearly eight years.

U.S. May crude oil futures, which expire Thursday, settled 82 cents higher at $72.17 a barrel, the first time U.S. futures settled above $72. The soon-to-be front month June contract settled $1.03 higher at $74.12.

Tensions over Iran have fueled a $13 rally on Brent so far this year.

WAITING FOR SOMEONE TO BLINK

"It's like the Cuban Missile Crisis, we are just waiting for someone to blink," said Michael Coleman, managing director of Singapore-based hedge fund Aisling Analytics.

Tuesday, the United States failed to secure international support for targeted sanctions against Iran and President George W. Bush refused to rule out nuclear strikes if diplomacy failed to curb the Islamic Republic's atomic program.

"All options are on the table. We want to solve this issue diplomatically and we're working hard to do so," Bush said.

The United States, which already enforces its own sweeping sanctions on Iran, wants the Security Council to be ready for strong diplomatic action.

The price of oil has trebled since the start of 2002 and is nearing the inflation-adjusted peaks above $80 a barrel reached in the early 1980s, just after the Iranian Revolution.

The high prices have sounded alarm bells in consuming nations fearful of an economic hit.

The International Monetary Fund said Wednesday the impact of higher oil prices on the global economy was a growing concern. The IMF said in its semiannual World Economic Outlook that it was worried the full effects of the surge in energy prices had yet to be felt.

It called on U.S. officials to consider higher gasoline taxes to curb oil consumption in the world's largest energy consumer. The U.S. burns a quarter of the world's oil, but raising taxes is political anathema in Washington.

An election year gridlock will likely keep the U.S. Congress from moving forward with any meaningful energy legislation this year, according to industry experts.

"They have no magic wand. They can talk about conservation and driving less. But it the end it's about the individual consumer," said Robert Ebel, an expert at the Center for Strategic and International Studies in Washington.

Ministers from the Organization of the Petroleum Exporting Countries (OPEC) will consult informally next week on the sidelines of an energy forum in Qatar, OPEC sources said.

Several OPEC ministers have said there is nothing more that the group can do to bring down oil prices, as it is already pumping near full tilt.

This group fared the worst in the wake of the stockmarket collapse, with their numbers falling sharply from 2000. Last year was the first time their total passed that of their peak in 1999. Catherine McBreen, a managing director at Spectrem, said: "It's been a great couple of years for America's millionaires ... the stockmarket, which posted solid improvement in 2005, was one reason for the advance. However, for the wealthiest Americans it appears the increased use of international markets and alternative investments were key drivers of their improvement."

George Walper, president of Sprectrem, said the group had questioned respondents on their investments and returns, and also examined the returns of international markets and alternative investments to ensure the veracity of the results. In a sudden reversal of their longstanding affinity for their domestic market, US investors last year put more than $130bn into international mutual funds, more than three times the amount they put into US funds.

Most overseas markets performed better than the US market, so their switch paid off.

Hedge funds returned on average only slightly more than the US stockmarket last year, but investable real estate and some private equity investments returned more than this.

Affluent households, on average, held close to half their money in assets - stocks, bonds and alternative investments - and a larger than usual amount of cash, Spectrem said.

The affluent reported a greater satisfaction with their financial advisers than in recent years, but this was still short of the highest level previously reported. Those who used advisers were shifting back to use full-service brokers as their main advisers.

An FCC spokeswoman declined to comment. Representatives of the four radio companies could not be reached for comment.

In the past, radio executives at firms including Clear Channel, the nation's largest station owner, have said that company policies prohibit accepting gifts for airplay and that internal probes have not revealed widespread wrongdoing.

The four broadcasters have been negotiating with the FCC for weeks to forestall a federal inquiry by offering to discontinue certain practices and pay limited fines. But those talks stalled last month over the issue of how much the broadcasters should pay.

Clear Channel proposed a fine of about $1 million, according to people with knowledge of the negotiations. Some commissioners were pushing for as much as $10 million, those sources said.

"We were in the process of trying to reach settlements, but when talks were inconclusive, we decided we needed more information," said an FCC official who spoke on the condition of anonymity because the investigation was continuing. "We will continue to speak with the parties and to hold those who have violated commission rules accountable."

The FCC requires that radio listeners be informed anytime there is an exchange of items of value for airplay of specific songs.

The FCC's action comes amid New York Atty. Gen. Eliot Spitzer's pay-for-play probe, launched in 2004, which has alleged wrongdoing by both music and radio companies. In February, Spitzer sued Entercom, alleging that high-ranking executives had implemented scams to trade cash for airplay of songs by such artists as Avril Lavigne, Liz Phair and Jessica Simpson.

Entercom has denied the allegations.

The other three radio companies are also under investigation by Spitzer, who has shared his evidence with the FCC.

Radio programmers at stations around the country say that fear of regulatory scrutiny has scared them into airing fewer new songs. Instead, many stations are sticking to less diverse playlists.

Bryan Tramont, who served as chief of staff to former FCC Chairman Michael K. Powell and is now an attorney in private practice, said the inquiry appeared to be more than a fishing expedition.

"The FCC would only launch a formal investigation if they had information leading them to believe possible violations have occurred," he said.

Other FCC insiders said this new stage of investigation could put broadcasters more at risk of previously undiscovered evidence of wrongdoing being found. The investigation could give the FCC access to millions of previously unexamined documents. It could also expand to include stations and radio executives across the nation.

"Until now, we've been limited to the evidence Spitzer gave us, but a formal investigation will compel the radio companies to answer certain questions, which are usually pretty exhaustive," said another current FCC official familiar with the inquiry. "It will all be on the record now, and once we start demanding documents, we can keep on going until we're convinced we've found everything."

Spitzer has been critical of the FCC's negotiations with radio companies, saying that if the federal government allowed stations to settle it would undercut his efforts to force tougher sanctions and rules on the industry.

"Unfortunately the FCC, contrary to good public policy, has not pursued an investigation of the underlying facts," Spitzer said in April. His representative could not be reached for comment.

The last time the FCC took action on pay-for-play allegations was in 2000, when it fined two stations in Texas and Michigan $4,000 each for not disclosing payments received from A&M Records in exchange for playing songs by Bryan Adams.

But the investigation launched Wednesday was evidence of the FCC's vigilance, said federal officials.

"The chairman has always taken these allegations seriously," said one FCC official, referring to FCC Chairman Kevin J. Martin. "We're not worried about criticisms."

The FCC's new investigation is the largest federal radio bribery inquiry since Congress opened hearings on pay-for-play in 1960. Those inquiries resulted in the first federal "payola" laws and killed the career of famed disc jockey Alan Freed, who pleaded guilty to two counts of commercial bribery and was fined $300.

The Bank of Spain said the notes were increasingly being drawn from high street banks and then disappearing. Last month 100m more notes were issued to high street banks than were handed in by them. That accounted for 26% of the total issued in all 12 eurozone countries, according to El País newspaper.

A booming building industry is thought to account for much of the high-denomination cash that has disappeared. Some 60% of real estate companies reportedly accept cash payments, while some are even said to demand them.

The deputy mayor of the southern town of Marbella, Isabel García, was found to have €378,000 in €500 notes in her safe when police arrested her in a corruption investigation earlier this month.

Spaniards have a tradition of squirreling savings away in cash hoards. "We had the same thing with 10,000 peseta notes," a central bank source said. "For some it is a way of laundering money. For others it is just a way of keeping their savings."