WASHINGTON, March 18 (UPI) -- With the plummeting dollar, geopolitical uncertainty and investor speculation all being blamed for soaring oil prices, it is unclear whether U.S. Vice President Dick Cheney's efforts to persuade Saudi Arabia to increase oil production will result in cheaper oil.

Oil prices briefly touched a record $112 a barrel Monday before falling more than $4 on fears the troubles at Bear Stearns (NYSE:BSC) could spread to the rest of the market. On Tuesday, however, they rose again ahead of an expected cut in interest rates by the Federal Reserve, part of a move to shore up confidence in the economy, but one that will likely see the dollar fall to new lows against other currencies.

"Speculation has dominated oil prices," said Gary Adams, vice chair of oil and gas at Deloitte & Touche USA LLP. "The lower U.S. dollar is driving value. … It's leading to a speculation in commodities as a hedge against the falling dollar."

The dollar, which has fallen to record lows against the euro and other currencies, has prompted investors to shift their attention from the greenback to commodities such as gold and oil, seen as safer bets. Pension funds and others are also pumping their money into oil, leaving little scope for prices to fall. The effects on the U.S. economy of the subprime mortgage meltdown led to Tuesday's expected interest rate cuts, which would in all likelihood lead to an even weaker dollar and higher oil prices, experts say.

President Bush earlier this month said he asked Cheney to urge Saudi Arabia, the world's No. 1 oil producer, to increase production in a bid to ease crude prices. Cheney is due to press the matter in Riyadh this week, but many say oil prices represent the reality of the market.