Tuesday May 6, 08:25 PM
Oil records shattered as price spike extends
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NEW YORK (AFP) - Oil prices spiked to new highs Tuesday in the latest frenzied trade driven by concerns over violence in key producer Nigeria and the weak US currency.
New York's main oil futures contract, light sweet crude for June delivery, leapt as high as 122.73 dollars per barrel, an all-time intraday high, before settling to a closing record high of 121.84 dollars, up 1.87 dollars.
London's Brent North Sea crude for June also reached an all-time high at 120.99 dollars a barrel, before slipping back to settle at a new high of 120.31 dollars for a gain of 2.32 dollars.
Runaway oil prices have almost doubled in the past year and have surged by more than 20 dollars since the start of 2008.
"Market headlines are dominated by the impact of currency fluctuations, geopolitics in the form of actual and potential threats to supply in Nigeria, Iraq and Iran, plus better-than-expected recent US economic data," said Barclays Capital analyst Kevin Norrish.
"Of these three drivers, we think it is supply losses that are the key driver at present."
Nigerian militants attacked an oil ship off the coast of the west African country and took two people hostage over the weekend.
Nigeria, Africa's largest oil producer, has seen an upsurge in violent attacks on its oil industry in the past two years.
Events surrounding Iran, the world's fourth biggest oil producer, gave added support to prices on Tuesday.
Andew Busch, analyst at BMO Capital Markets, cited "rumors of US action against Iran circulating in the markets" that affected oil and the dollar.
Iran said Monday it would reject any offer that violates its right to master the full nuclear fuel cycle after world powers said they had prepared a new package to end the atomic crisis.
The West fears Iran could use uranium enrichment to make atomic weapons.
Iran denies it wants to do this and insists it has a right to enrich and make nuclear fuel as a signatory to the nuclear Non-Proliferation Treaty.
Record (LSE: REC.L - news) -breaking oil prices have sparked widespread international concern among consumer nations.
Kuwaiti Oil Minister Mohammad al-Olaim last week said that OPEC may hold an extraordinary meeting on oil prices before a scheduled conference in September and did not appear to rule out higher production.
However, Libya's acting oil minister Chukri Ghanem recently indicated that the Organization of the Petroleum Exporting Countries could not pump more crude.
On Tuesday, the Indonesian government said it was considering withdrawing from OPEC, which produces about 40 percent of the world's oil.
Indonesia is the only Southeast Asian member of the oil cartel but declining production levels have turned it into a net importer.
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