Oil prices set new record above $118 a barrel

Oil prices set new record above $118 a barrel
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First Published: Tue, Apr 22 2008. 04 47 PM IST
Updated: Tue, Apr 22 2008. 04 47 PM IST
Oil prices rose Tuesday to a new record above $118 a barrel supported by concerns about crude supplies from some key producers.
Light, sweet crude for May delivery rose as high as $118.05 a barrel in electronic trading on the New York Mercantile Exchange, eclipsing Monday’s all-time high of US$117.83.
By midday in Europe, the contract had risen to $117.77, up 29 cents on Monday’s close of $117.48 a barrel. The May contract expires at the end of trading Tuesday.
In London, Brent crude futures added 28 cents to $114.71 a barrel on the ICE Futures exchange.
A Royal Dutch Shell PLC joint venture in Nigeria said Monday it may have to cut crude deliveries some 169,000 barrels a day in April and May because militants sabotaged a pipeline last week in the country’s south.
The company, Shell Petroleum Development Co, declared force majeure on its April and May oil delivery contracts from its 400,000-barrel-a-day Bonny fields, effective April 22, a move that protects it from litigation if it fails to deliver on contractual obligations to buyers.
Militancy and lawlessness has grown in recent years in Nigeria’s south, and attacks on oil infrastructure have become common.
“The disruption in Nigeria with Royal Dutch Shell is serious,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “It is light, sweet crude, which is much desired by the US market during the summer gasoline season, so that certainly has affected the market,” Shum said.
Nigeria is a major supplier to the United States. Attacks there in the past two years have cut nearly a quarter of the African country’s oil output.
Crude oil also rose Monday after the 150,000-ton tanker Takayama was attacked off the coast of Yemen as it headed for Saudi Arabia.
Kyodo News agency reported that the Japanese tanker was fired on by a rocket launcher from a small boat. None of the ship’s 23 crew members was injured, the company said, but hundreds of gallons of fuel leaked before a 1-inch hole in the tanker’s stern was repaired.
Analysts said comments Tuesday by the head of the Organization of Petroleum Exporting Countries about plans to boost oil production target capacity by 5 million barrels a day by 2012 would not have an immediate effect on oil prices.
Speaking at an energy forum in Rome, OPEC Secretary-General Abdalla Salem el-Badri told reporters that issues of supply and demand were being discussed but he did not expect any agreement on whether prices are too high or too low.
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First Published: Tue, Apr 22 2008. 04 47 PM IST
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