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SINGAPORE: World oil prices hit an intraday record
near $120 a barrel on Monday after the shutdown of a major North Sea
pipeline added to supply worries, analysts said.
New York’s main oil futures
contract, light sweet crude for delivery in June, touched $119.93 a
barrel in electronic deals and was later trading in Asia 86 cents
higher at $119.38.
The contract closed $2.46 higher
at $118.52 a barrel on Friday at the New York Mercantile Exchange.
Brent North Sea crude for June
delivery rose 72 cents to $117.06 a barrel after a rise of $2 to
$116.34 on Friday, when the contract hit a record intraday peak of
$117.56.
Over the past two weeks oil has
crashed through a series of records, sparking international concern.
Prices were boosted by the weaker US dollar, supply worries and the
OPEC cartel’s reluctance to increase output, dealers said.
OPEC is the Organization of
Petroleum-Exporting Countries.
David Johnson, an oil analyst at
Macquarie Research in Hong Kong, said prices could breach the
psychologically important $120 level later Monday.
“Supply worries have pushed oil
prices higher since Friday, and will remain the dominant influence
on prices in the near term,” said David Moore, a commodity
strategist at the Commonwealth Bank of Australia in Sydney.
Britain on Sunday shut down a
North Sea pipeline, which supplies 40 percent of its oil and gas,
sparking panic buying of petrol after a strike at a major refinery.
The start of a two-day walkout by
around 1,200 workers at the Grangemouth refinery, west of Edinburgh,
in Scotland, forced the neighboring Forties pipeline to close down
at the same time, operator BP said.
The pipeline brings more than
700,000 barrels of crude oil ashore every day and supplies Britain
and international markets. It cannot function without power and
steam from Grangemouth.
Prices rallied on Friday as the
Grangemouth plant was shut down ahead of the strike, which is over
pensions.
The disruptions in crude supplies
are “potentially quite significant,” said Moore. “The loss of
crude oil from Scotland is quite material in the context of the oil
market.”
Alan Duncan, the British
Conservative Party’s industry spokesman, warned that the closure
would hit world oil prices.
“The interdependence of our
North Sea oil production, and the refinery … has implications for
global oil prices,” he told Sky News television.
“So world oil prices have gone
up, and we’re going to see local oil prices and petrol prices
going up.”
In Africa’s biggest crude
producer, Nigeria, the most prominent armed group in the southern
oil-producing region on Friday sabotaged a supply pipeline belonging
to Anglo-Dutch energy giant Shell.
Shell spokesman Tony Okonedo
confirmed the attack, but said he could not comment on the extent of
the damage.
Several supply pipelines owned by
Shell and Chevron have been destroyed in recent weeks.
--AFP
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