Oil Sets Another Record, Settling Above $117

Crude oil prices hit a record closing high over $117 a barrel on Monday as rebel attacks cut Nigerian supplies and a Scottish refinery strike threatened North Sea crude production.

Further support came as OPEC officials said the market had enough oil and that the producer group would not ramp up output to help bring down prices despite calls for more oil from some consumer nations.

U.S. light crude rose to $117.48 on the New York Mercantile Exchange, after hitting an intraday record high of $117.60 hit earlier. London Brent crude traded up 16 cents at $114.08 a barrel after hitting an all-time peak of $114.86.

Pipeline attacks in OPEC member Nigeria last week shut 169,000 barrels per day (bpd) of Bonny Light production, forcing Royal Dutch Shell to declare force majeure on exports of the crude.

Nigerian rebels also attacked two Shell oil pipelines in the Niger Delta on Monday after the raid last week in what they called an act of defiance against major consumer the United States.

A threatened strike by Scottish oil refinery workers has also stirred supply concerns.

The Grangemouth refinery has begun shutting down ahead of a two-day strike due to start on Sunday. Some North Sea oil and natural gas output will have to be shut in if the union halts the refinery, operator Ineos said.

Despite oil's rise to fresh peaks, OPEC officials reiterated their insistence that markets have enough crude.

"OPEC has put the maximum supply in the market — this is not a problem of supply, it's a problem that is very connected to the financial problems in the U.S. economy," Venezuelan Oil Minister Rafael Ramirez told Reuters at the International Energy Forum in Rome.

Iranian oil minister Gholamhossein Nozari said oil prices were not too high in real terms, even as U.S. pump prices hit a fresh record as the world's top consumer gears up for the summer driving season.

Oil prices have more than quadrupled since 2002 as supply struggles to keep pace with surging demand from emerging economies such as China.

The rise in fuel costs has added pressure to the struggling U.S. economy, but Energy Secretary Sam Bodman on Monday said he had did not favor tapping emergency reserves to help bring down oil prices.

The weak U.S. dollar has also contributed to oil's rally, devaluing assets in the U.S. currency and pushing investors to shift part of their money to commodities and oil.

A Reuters poll of analysts ahead of weekly government inventory data to be released on Wednesday forecast U.S. crude stocks fell 1.8 million barrels in the week to April 18, a 2.3-million-barrel drop in gasoline supplies and a 100,000-barrel draw in distillate stocks.

Copyright 2008 Reuters. Click for restrictions.