Crude has hit a new all-time high of USD 127.42 per barrel on speculation that China will need to increase diesel purchases for its generators. Some of China's power plants were shut after earthquake. Traders are also closely monitoring the meeting between US President George W. Bush and Saudi King Abdullah expected to happen later today.

Crude prices had fallen to USD124/bbl levels earlier due to a big increase in US natural gas stocks, which spurred profit-taking from recent highs.

In after hours access trading, crude was at USD124.76/bbl.