Washington today told American motorists to grow accustomed to gas prices of $4 a gallon after Guy Caruso, the head of the US Energy Department's information agency warned that he expected the oil price to stay well above $100 a barrel for the next 18 months.

The grim outlook triggered a sharp rise of oil futures contracts traded in New York.

The price of a barrel of light sweet crude oil for delivery in July jumped $4.40 to $135.81 in earlier trading, below the $139 a barrel record set on Friday.

Oil traders were also unnerved by official data from the US Energy Department published today that American oil stocks had fallen four times faster than had been expected last week.

Wall Street had forecast that US oil inventories would have fallen by 1.4 million barrels, instead Americans used up 4.6 million.

At the same time, policymakers in Washington met to argue about the best way forward to stem the rise in oil. Their hearing came after the Commodities and Futures Trading Commission (CFTC) met this week to discuss the opening of an inquiry into whether Wall Street and oil companies have been seeking to manipulate the price of oil across financial markets.

On Tuesday, the CFTC announced the formation of an interagency taskforce made up of the CFTC, the US Federal Reserve, the Treasury, the Securities and Exchange Commission, the Department of Energy and the Department of Agriculture, to examine the role of financial speculators in the rising price of oil.

Earlier today, giving evidence to the House Select Committee on Energy Independence and Global Warming, Mr Caruso said that the US Department of Energy predicted that the pump price would average around $3.92 a gallon throughout next year.

One of the four individuals giving evidence to the committee - Athan Manuel, director of Land Protection Programs for the Sierra Club - was grilled about why he was opposed to trying to exploit America's untapped oil and gas reserves in Alaska, off the coast of Florida and within the Guld of Mexico.

Mr Manuel defended the group's decision claiming that he believed that seeking to increase US extraction and production of oil and gas reserves would "make no difference to the price of gas. There is no historical evidence to show that opening up fields in the US has affected the price of gas."

He argued that America should focus on weaning itself off gasoline.

Across the Atlantic, the European Commission indicated that it believed oil prices would remain high and told its member governments not to offer short term handouts to fishermen, farmers, lorry drivers and other businesses who are taking the brunt of the rise in the cost of fuel.

Johannes Laitenberger, an EU spokesman, said that the "most appropriate response” to high oil prices was to accelerate the restructuring of struggling business sectors, such as industrial fishing, reducing taxes on goods and services which save energy and help out individuals on very low incomes who are not able to absorb the rising cost of fuel.

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