New York oil price crosses 120 dollars for first time
©AFP - Asif Hassan
NEW YORK (AFP) - Oil prices crossed 120 dollars a barrel in New York Monday following fresh unrest in Nigeria, Africa's largest oil producer, and rising tensions between the West and Iran.
New York's main oil futures contract, light sweet crude for June delivery, briefly hit 120.20 dollars, before slipping back at 1520 GMT to 120 dollars, a gain of 3.68 dollars from the closing price on Friday.
In London, Brent crude for June delivery hit an intraday record high of 118.50 dollars around 1515 GMT. It later traded up 3.24 dollars at 117.80. Trading volume in London was light as Britain marked a bank holiday.
Oil rallied close to a record 120 dollars a barrel last week on supply concerns linked to workers' strikes at a Scottish refinery and in Nigeria.
With the strikes resolved, crude prices were largely driven by movement in the US dollar, according to analysts.
"This stubborn oil bull just refuses to die," said Phil Flynn at Alaron Trading.
Oil prices surged Monday on supply jitters from Nigeria and geopolitical tension in Iran, analysts said.
"Nigeria is the lingering hotspot the markets will be focusing on," said MF Global analyst Ed Meir.
"The news over the weekend has been mixed; ExxonMobil said it has restarted 300,000 barrels per day of Nigerian production out of total of 800,000 sidelined earlier, but there are reports of fresh violence, as another pipeline explosion has shut in more oil production," he added.
Fresh militant attacks in Nigeria, Africa's biggest producer, have forced oil major Shell to shut down more of its oil production.
Nigerian militants attacked an oil ship off the coast of the west African country and took two people hostage, a military spokesman said Sunday. Shell accounts for about one-half of Nigeria's 2.1 million barrels-per-day output.
"A few oil delivery lines are affected and some oil has spilled into the environment," a Shell spokesman said.
Prices also got support from tensions between Iran and the West.
Iran said Monday it would reject any offer that violates its right to the full nuclear fuel cycle after world powers said they had prepared a new package to end the atomic crisis.
Oil players fear the ongoing tension could result in Iran -- the second-biggest OPEC producer after Saudi Arabia -- using oil as a bargaining chip.
Oil prices rose three percent Friday on better-than-expected employment figures in the United States which raised hope the world's biggest economy might avoid a recession.
The bombing by Turkish warplanes of Kurdish rebel bases inside Iraq and the strengthening of the dollar against the euro also supported oil prices.
Meanwhile, recent positive sentiment out of the United States has improved the demand prospects for most commodities.
"The market is also obviously responding to the US nonfarm payrolls report that suggests that the recession here is less severe than had been feared and thus suggesting that hopes for reduced US demand are ill-advised," said Dennis Gartman, editor of The Gartman Letter.
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