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Crude Oil Jumps to Fresh Record of $117 a Barrel

Oil prices hit a record high $117 a barrel Friday as jitters over Nigerian oil supplies outweighed a rally in the dollar and fears of an economic slowdown in giant energy consumer China.

Oil Pipeline
Oil Pipeline

U.S. light crude settled up $1.83 at $116.96 a barrel, before hitting a record $117.

London Brent crude gained $1.49 to $113.92.

Oil prices have more than quadrupled since 2002 as supply struggles to keep up with booming demand, especially in China and other emerging economies.

"The bulls still hold the cards," said Mike Fitzpatrick of MF Global in New York.

A Nigerian rebel group said Friday it had sabotaged a major oil pipeline operated by Royal Dutch Shell and vowed to step up attacks on oil installations.

Shell officials, which is currently pumping 400,000 barrels per day below capacity in the OPEC nation due to sabotage and security concerns, confirmed a small amount of production had been shut in.

Strikers at the major southern French oil port of Fos-Lavera vowed to remain on picket lines through Saturday.

The strike trapped 23 vessels, including four crude oil tankers and six refined products tankers in the port.

A similar strike March lasted 17 days and forced four oil refineries with 603,000 barrels per day of combined capacity to curtail operations, helping spur a late spring rally in European diesel prices.

A British union will launch a two-day strike from April 27 at Ineos Grangemouth refinery, forcing it to shut down with an impact on the North Sea Forties pipeline system, which terminates there, both sides said on Friday.

Strong demand for diesel fuel in emerging markets has been offsetting weakness in U.S. oil demand, analysts at Goldman Sachs said in a research note released Friday.

Goldman expects U.S. crude oil futures to average $105 a barrel this year and end the year at $115 a barrel, driven by tight distillate supplies and continued increases in the cost of building new oil production capacity.

Oil had fallen as low as $112.72 overnight after the dollar rallied against other major currencies as Citigroup, the biggest U.S. bank, delivered better than expected quarterly results.

A sharp fall in China's stock market on Friday spurred concerns over a possible economic slowdown in China, the world's second largest consumer of oil.

China's stock market fell nearly 4 percent to a 12-month closing low as the biggest stock, PetroChina slid below its October initial public offering price in Shanghai.

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