Oil prices hit 137 dollars after fresh Nigeria outage
LONDON (AFP) - World oil prices jumped to 137 dollars a barrel on Thursday, within reach of record heights, after a militant attack slashed output in Nigeria, Africa's biggest crude producer. Prices later fell, however, as dealers banked profits. New York's main oil futures contract, light sweet crude for July delivery, spiked to 137.00 dollars per barrel before pulling back slightly.
It later stood at 136.35 dollars, down 33 cents and not far off an all-time high of 139.89 which was reached on Monday.
London's Brent North Sea crude for August delivery touched 137.05 dollars on Thursday, before falling back to 136, down 44 cents.
Brent had hit a life-time peak of 139.32 dollars on Monday. "Oil prices were a little lower (after the spike), with the strengthening dollar outweighing fresh supply concerns over Nigeria," said Sucden analyst Andrey Kryuchenkov.
A stronger dollar makes commodities priced in the US currency more expensive for foreign buyers, which in turn can dampen demand for crude.
Prices had leapt higher on Thursday after Anglo-Dutch oil giant Shell said it had shut down production at a major offshore oil facility in Nigeria because of a militant attack.
"We shut down production at the Bonga oilfield following an attack by unknown militants this morning," Shell spokesman Precious Okolobo told AFP.
Violence in the southern Delta region has reduced Nigeria's total oil production by a quarter since January 2006.
Crude futures had reached historic high points earlier this week as traders were gripped by supply jitters, despite news that Saudi Arabia could lift production to help dampen the market.
An announcement of an output increase from the world's biggest oil exporter was expected at a meeting between oil producers and consumer nations in Saudi Arabia on Sunday to discuss surging prices. China said on Thursday that Vice President Xi Jinping would attend the high-profile international energy conference in Jeddah, in a bid to look for a solution to the challenges caused by soaring crude.
"We hope that through the meeting the relevant parties will enhance dialogue and coordination so as to properly handle the challenges caused by the high price of oil for the international economic situation," foreign ministry spokeswoman Jiang Yu told reporters. China accounts for around 40 percent of the growth in global oil consumption, and looks warily on increasing prices.
But Jiang sought to calm fears on Thursday, saying China relied on itself for more than 90 percent of its energy consumption.
British Prime Minister Gordon Brown will also attend Sunday's meet. The price of crude oil had rallied on Wednesday after news of a drop in crude inventories in the United States, which is the world's biggest energy consumer.