SINGAPORE -- Oil prices traded within sight of a record high Wednesday, capping any gains for the dollar, while resource stocks in Asia rose on sky-high energy and metals prices.

US crude was steady at $121.79 a barrel, just off a record high at $122.73 in New York. Prices have doubled in the past year and Goldman Sachs -- which had predicted oil would hit $100.00 a barrel -- forecasts a potential spike to $200.00.

The surge in energy prices, agricultural commodities and base metals -- a headache for central banks eager to ward off inflation -- boosted shares in Japanese trading houses, such as Marubeni, and Australian miners, such as Rio Tinto and BHP Billiton.

Asian equity markets were also supported by Wall Street's advance Tuesday after officials of the largest US mortgage financing company Fannie Mae said they were cautiously optimistic that the worst of the credit crisis had passed even after posting a $2.5 billion quarterly loss.

Japan's Nikkei average rose 0.9 percent by the midsession as the country's financial markets reopened after being closed Monday and Tuesday for national holidays.

MSCI's measure of Asian stocks outside Japan was up 0.2 percent by 0211 GMT, having earlier hit its best level since mid-January. The benchmark is down just under 6.0 percent so far this year.

But some investors were unconvinced that the worst of the credit crisis was over.

"The financial sector will probably remain perhaps a little under pressure for the time being," said Martin Angel, a dealer at Patersons Securities.

"It's really a case of people second-guessing themselves at the moment. Everyone would like it to be over but these things don't just happen overnight."

Stock indexes in Sydney, Seoul, and Singapore added between 0.2-0.4 percent.

In New York Tuesday, the Dow Jones industrial average rose 0.4 percent and the Nasdaq Composite Index gained 0.8 percent.

DOLLAR EYES OIL

The dollar steadied Wednesday, having pulled back from a two-month peak against a basket of currencies last week as the jump in oil prices to record peaks was seen as a negative for the US currency.

The US currency typically moves in the opposite direction of oil and gold prices, while the steep cost of crude was also seen prompting Middle East producers to shift some of the dollar-based windfall into other currencies.

The dollar edged up to 104.88 yen up from near 104.75 yen in late US trade. The euro slipped to $1.5495 from $1.5595 overnight.

Gold was steady, hovering near a one-week high hit the previous day at between $876.55/$877.55 an ounce.

The 10-year Japanese government bond yield climbed to a seven-month high as dealers and investors returned from holidays in Japan to trade on falls in US 10-year Treasury notes and a rise in equities.

Benchmark US 10-year Treasury notes have fallen in the wake of data late last week that showed the US economy lost a fewer-than-expected 20,000 jobs in April, easing worries that the US economy might fall into a deep recession.

The 10-year JGB yield climbed by as much as four basis points to 1.680 percent to hit the highest level in nearly seven months, before falling back to 1.655 percent.

June 10-year JGB futures fell 0.26 of a point to 135.48.