HOUSTON -- Oil prices surged again Wednesday to a new high for the year with investors pouring money into crude markets as a hedge against inflation, according to The Associated Press.

Adding to crude's advance was new government data that showed an uptick in U.S. demand for gasoline, and a report from oil giant BP PLC that said the world's proved oil reserves fell in 2008, the first drop in a decade.

Benchmark crude for July delivery rose $1.26 to $71.27 a barrel in trading on the New York Mercantile Exchange after earlier touching $71.79. On Tuesday, it jumped $1.92 to close at $70.01.