Oil Rises to $119 on U.S., Iran Tensions

By Reuters -  |  Posted 2008-04-25 Email Print this article Print

Oil prices climb again. 

LONDON (Reuters) - Oil climbed above $119 a barrel on Friday after a workers strike cut production in Nigeria and tensions rose between the United States and Iran.

U.S. crude futures surged $3.15 to $119.21 a barrel by 1454 GMT (10:54 EDT), within striking distance of the all-time peak of $119.90 reached on Tuesday.

London Brent crude traded $2.98 higher at $117.32 a barrel, after hitting a new record of $117.51 earlier in the session.

A ship contracted by the U.S. Military Sealift Command fired at least one shot toward an Iranian boat, a U.S. defense official said. No further details were immediately available.

The United States in January said Iranian boats threatened its warships along a vital route for crude oil shipments.

Oil also found support from a significant cut in Nigerian production due to a workers strike and rebel attacks.

"You have everything coming together and that's lifting us off again," said Tom Bentz, analyst for BNP Paribas Commodity Futures in New York.

A strike by Nigerian workers at Exxon Mobil (XOM.N: Quote, Profile, Research) has forced the company to shut down some 200,000 barrels per day of crude oil output, a senior union official said.

Exxon has surpassed Royal Dutch Shell as the top foreign oil producer in Nigeria after Shell was struck by repeated militant attacks on its facilities.

Nigerian rebels said on Friday they had sabotaged an oil pipeline in the Niger Delta belonging to Royal Dutch Shell (RDSa.L: Quote, Profile, Research) late on Thursday.

"Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," the Movement for the Emancipation of the Niger Delta (MEND) said in an emailed statement.

Shell confirmed the attack and said it was trying to assess the extent of the damage to the pipeline.

Shell has been forced to shut 169,000 bpd of Bonny Light crude oil output after a pipeline attack there a week ago.

In the North Sea, BP (BP.L: Quote, Profile, Research) said it had begun shutting down UK's Forties oil pipeline in preparation for a planned strike at a major Scottish refinery this weekend.

The 700,000 barrel-a-day Forties pipeline carries about half of Britain's North Sea oil production.

(Editing by James Jukwey)


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