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Scottish strike and Nigerian attack boost oil

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Financial Times: Scottish strike and Nigerian attack boost oil

By Chris Flood
Published: April 29 2008 03:00 | Last updated: April 29 2008 03:00

Oil traded at record levels near $120 a barrel yesterday amid supply concerns following the start of a strike at the Grangemouth refinery in Scotland and more trouble in Nigeria.

Nymex June West Texas Intermediate hit a record $119.93 a barrel before easing back to settle 23 cents higher at $118.75. ICE June Brent added 40 cents to close at $116.74 a barrel.

The two-day strike at the Grangemouth refinery will also cause significant disruption to oil output from the UK sector of the North Sea with the closure of the 700,000-barrels-a-day Forties crude pipeline.

In Nigeria, more than half of the oil output of the world’s eighth largest crude exporter has been shut by a strike and violence. Militants claimed that an attack on a pipeline last week shut a further 350,000 b/d of oil output for Royal Dutch Shell, which had already closed 169,000 b/d of output after an earlier raid. ExxonMobil, the largest foreign oil producer in Nigeria, has shut virtually all of its oil production, totalling 700,000 b/d, owing to a strike.

A rise in oil prices to $200 a barrel has not been ruled out by Chakib Khelil, president of Opec, who said supplies were adequate but blamed the slide in the dollar for rising crude prices.

US petrol prices are at record levels, but hedge funds are betting on further increases. The latest data from the Commodity Futures Trading Commission showed the speculative net long position (bets on prices rising) rose 14.2 per cent to a record 61,954 lots in the week ending April 22. Nymex May RBOB unleaded gasoline slipped 1.5 cents to $3.0385 a gallon after touching a record $3.0815 Friday.

Gold climbed 0.9 per cent to $894.90 a troy ounce, helped by rising oil prices.

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