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Oil prices shoot to record peaks, New York oil closes at record 117.48 dlrs
NEW YORK
Petroleumworld.com, April 22, 2008
Oil hit fresh record highs Monday amid reports of pipeline sabotage in Nigeria and as the US dollar remained weakened, traders said.
Market participants said OPEC's stance not to increase its output against rising prices was also stoking values higher.
New York's main oil futures contract, light sweet crude for delivery in May, struck a new peak in intraday trading of 117.76 dollars before closing at 117.48 dollars, which marked a record closing high.
The contract has jumped 79 cents compared with Friday's closing level.
In London, Brent North Sea crude for June delivery settled up 51 cents at an all-time settlement high of 114.43 dollars after hitting an intra day record summit of 114.86 dollars.
Sucden analyst Nimit Khamar said the market was "supported by geopolitical concerns surrounding Nigeria and comments from OPEC, who over the weekend once again reiterated their reluctance to increase production."
The latest record-breaking run smashed previous highs set on Friday as news emerged of another apparent pipeline attack in Africa's biggest oil producer Nigeria.
The most prominent militant group in Nigeria's southern oil-producing region said it had sabotaged two pipelines, possibly belonging to Anglo-Dutch oil giant Shell and US rival Chevron.
An email sent to AFP early Monday said that "Commandos from the Movement for the Emancipation of the Niger Delta (MEND) in continuation of Operation Cyclone attacked two major oil pipelines in Rivers state of Nigeria.
"The pipelines may belong to Shell and Chevron," the message added.
It described Operation Cyclone as "the crippling of the Nigerian oil export industry."
Anglo-Dutch oil giant Shell said it may not be able to honor contracts for April and May in the wake of MEND's statement.
"We can confirm that force majeure will be declared on Bonny Terminal liftings for April and May 2008," a company official said.
Shell spokesman Tony Okonedo said he could "confirm two new attacks on the Soku-Buguma and Buguma-Alakiri pipelines," adding: "We are assessing the damage to these facilities."
Shell, Nigeria's largest oil operator accounting for around half of the country's 2.1 million barrels per day output, has seen a wave of attacks on its facilities in recent months.
OPEC president and Algerian Oil Minister Chakib Khelil said over the weekend that there was no need for an immediate hike in production.
He said the cartel, which produces around 40 percent of the world's oil, "does not need to raise output in the near future," according to Kuwait's KUNA news agency on Sunday.
The Organization of the Petroleum Exporting Countries has defiantly held its daily output quota at 29.67 million barrels since its last meeting in March, despite repeated calls from US President George W. Bush to hike production.
Oil prices are unlikely to fall back below 90 dollars, the Venezuelan energy minister Rafael Ramirez said Monday.
"We believe that prices will remain around this level, at least around 90 dollars," Ramirez told reporters on the sidelines of the International Energy Forum in Rome.
"Oil prices can't fall" much further because "production costs have increased," he said.
Iraqi oil minister Hussain Al-Shahristani argued that an increase in OPEC production would not bring relief since prices were being driven primarily by speculative investment in commodities.
In recent months, oil prices have also been boosted by the weak dollar.
The sliding value of the US currency makes dollar-priced goods cheaper for foreign buyers and tends to encourage oil demand, traders said.
Story from AFP
AFP 21 1948 GMT 04 08
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