Business | Oil & Gas

Oil hits $120 on supply concerns

Oil hit another record near $120 a barrel on Monday, boosted by a string of bullish factors that included big disruptions to Nigeria's output and a UK refinery strike, highlighting anxieties over threats to supply.

  • Reuters
  • Published: 11:47 April 28, 2008
  • Gulf News

  • Crude prices have surged more than five-fold since 2002 as global supplies struggle to keep pace with rising demand in emerging economies.
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London: Oil hit another record near $120 a barrel on Monday, boosted by a string of bullish factors that included big disruptions to Nigeria's output and a UK refinery strike, highlighting anxieties over threats to supply.

Prices retreated from early peaks as the dollar gained versus the euro, reflecting some expectations that the US Federal Reserve may not cut interest rates this week. US light crude for June delivery was up 37 cents at $118.89 a barrel by 1534 GMT, after a record high of $119.93. Prices are up almost 25 per cent since the start of the year.

London Brent crude was up 43 cents at $116.77.

"Continued attacks in Nigeria and refinery closures in Scotland ... may see the US target $121-$122 this week, with longer-term charts all pointing to $130 or higher," said Ben Coleman, senior commodities trader at TradIndex.

Crude prices have surged more than five-fold since 2002 as global supplies struggle to keep pace with rising demand in emerging economies, such as China.

Years of underinvestment in new oil production means the market could struggle to keep pace with booming China demand. The finely-balanced supply-demand outlook has made prices sensitive to any supply disruptions.

ExxonMobil has had to shut nearly all of its Nigerian oil production, totalling around 770,000 barrels per day, due to a strike.

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